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Deutsche Bank could settle Libor probe this month - source

By Karen Freifeld

(Reuters) - Deutsche Bank AG (DBKGn.DE), which faces allegations that it tried to rig the Libor benchmark interest rate, could settle with U.S. and UK authorities as early as this month, a source familiar with the matter said.

The penalties are likely to exceed $1.5 billion, the amount UBS Group AG (UBSG.VX) paid in 2012, the source said.

Negotiations also involve the possibility of a Deutsche UK subsidiary pleading guilty, the person said.

Deutsche bank executives could be targeted for discipline, but many of them have already left the bank, the source said.

Germany's largest lender may be among the last to settle with the authorities over the Libor manipulation scandal.

New York's Department of Financial Services is also involved in the Deutsche Libor probe, unlike in the case of the other banks.

"We continue to work with the authorities that are reviewing interbank offered rates matters," Michele Allison, a spokeswoman for the bank said in a statement, but declined to comment further.

U.S. Justice Department spokesman Peter Carr declined to comment on any potential agreement.

Deutsche Bank already settled with European antitrust regulators over Libor and its euro equivalent Euribor last year, agreeing to pay 725 million euros.

Deutsche Bank, the world's second-largest foreign exchange trader, is also under investigation by U.S. authorities over other practices, including possible manipulation of emerging markets currency rates.

Steven Adamske, a spokesman for the U.S. Commodity Futures Trading Commission, which is also involved in the probe, declined comment.

Ronald Klug, a spokesman for New York's Department of Financial Services, declined comment.

(Additional reporting by Amrutha Gayathri in Bengaluru)