Americans should be outraged today as The New York Department for Financial Services announced that Deutsche Bank will pay a $2.5 billion fine “in connection with the manipulation of the benchmark interest rates, including the London Interbank Offered Bank (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”) and Euroyen Tokyo Interbank Offered Rate (“TIBOR”) (collectively, “IBOR”).”

Predictably this latest fine is “the largest fine to date in the sprawling worldwide Libor investigation” according to the Financial Times. And yet it still amounts to just a slap on the wrist for another megabank as we shall explain below.

The bank’s fines will be allocated as follows: New York State Department of Financial Services (NYDFS) will get $600 million, $775 million will go to the U.S. Department of Justice (DOJ), and $340 million to the United Kingdom’s Financial Conduct Authority (FCA). $800 million will end up in the bank accounts of the Commodities Futures Trading Commission (CFTC).

Legitimate traders hope that the CFTC which can now afford to upgrade its systems to actually have some sense of the pervasive manipulation taking place in the S&P futures market on a daily basis.

Most shockingly, despite the record fine, nobody will go to jail. Again. Just like JP Morgan. Just like HSBC. Just like UBS. Etc. Etc.

The latest fine should have Americans outraged. There are clearly two set of standards being applied – one for common folks, who go to jail for much lesser offences and one for rich bankers, who simply pay to avoid jail time. To cap it all off the fines are socialized amongst the banks shareholders, including your pension funds, so effectively it is main street America that pays the fine and not the bankers themselves.

To give some sense of absurdity the fine works out to Deutsche Bank paying $25,474 per employee to keep its Libor-manipulating employees out of prison, which is a bargain compared to the $150,000 per employee JP Morgan had to pay late last year.

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