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Central bank brings back negative deposit rate

Nationalbanken follows the lead of the European Central Bank and lowers its deposit rate to -0.05 percent.

Central bank brings back negative deposit rate
Nationalbanken. Photo: gcbb/WikiCommons
Denmark's central bank Nationalbanken cut its deposit rate into negative territory on Thursday after the European Central Bank made a surprise cut in key interest rates to avoid deflation.
 
The deposit rate, which was below zero from July 2012 until April this year, was lowered to -0.05 percent from 0.05 percent.
 
The lending rate, the current account rate and the discount rate were kept unchanged.
 
"The interest rate reduction is a consequence of the reduction by the European Central Bank of its monetary policy rates by 0.10 percentage point," the Nationalbank said in a statement.
 
The deposit rate is the rate at which commercial banks are paid, or in this case have to pay, to place funds at the central bank.
 
Denmark's current monetary policy is aimed at maintaining a stable exchange rate between the Danish krone and the euro. The krone is pegged to the euro through an agreement known as the European Exchange Rate Mechanism (ERM II), under which the Danish currency can move only 2.25 percent up or down from a fixed rate of 7.46 krone per euro.

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BANK

Deutsche Bank to pay $130m to settle US bribery probes

Deutsche Bank will pay $130 million to settle a foreign bribery probe and fraud charges in precious metals trading, US officials announced on Friday.

Deutsche Bank to pay $130m to settle US bribery probes
A woman walks past the offices of Deutsche Bank in London. Photo: Tolga Akmen / AFP
The bribery case relates to illegal payments and to false reporting of those sums on the bank's books and records between 2009 and 2016, the Department of Justice said in a press release.
   
The bank “knowingly and wilfully” kept false records after employees conspired with a Saudi consultant to facilitate bribe payments of over $1 million to a decision maker, the DOJ said.
   
In another case, the bank paid more than $3 million “without invoices” to an Abu Dhabi consultant “who lacked qualifications… other than his family relationship with the client decision maker,” the DOJ said.
   
In addition to criminal fines and payments of ill-gotten gains, Deutsche Bank agreed to cooperate with government investigators under a three-year deferred prosecution agreement.
 
   
In the commodities fraud case, Deutsche Bank metals traders in New York, Singapore and London between 2008 and 2013 placed fake trade orders to profit by deceiving other market participants, the DOJ said.
   
The agreement took into account Deutsche Bank's cooperation with the probes, DOJ said.
   
“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” said Acting US Attorney Seth D. DuCharme of the Eastern District of New York.
   
“This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”
   
“We take responsibility for these past actions, which took place between 2008 and 2017,” said Deutsche Bank spokesperson Dan Hunter, adding that the company has taken “significant remedial actions” including hiring staff and upgrading technology to address the shortcomings.
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