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Bafin Paper Tiger’s New Claws May Not Scratch in Rate Scandals

Bafin, the German financial watchdog that’s been called a “Paper Tiger” because it can’t fine for abuses like Libor-rigging, got its claws sharpened this year. It may not help in the next benchmark scandal.

While the watchdog can levy large fines under the new rules for some offenses -- such as not meeting capital requirements, failing to disclose information or not fulfilling duties in granting loans -- manipulating rates isn’t one of them. That means they probably can’t be used in Bafin’s probes into precious metals benchmarks and other rates.