Deutsche-Ille ruling changes sales practices for German dealers

Accentuate the negative

Michael Schick

In March, the Federal Court of Justice in Karlsruhe, Germany, ordered Deutsche Bank to pay €541,000 in damages over the 2005 restructuring of two interest rate swaps. The size of the award has proved to be incidental, however. Far more significant was the detail of the ruling, which turned on Deutsche’s failure to disclose that the restructured swap – a relatively complex trade in which the client’s floating payments were tied to the spread between two-year and 10-year Euribor – had a negative

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