Deutsche Bank braces for Fed restrictions on its US business



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Deutsche Bank braces for Fed restrictions on its US business

In the wake of a cascade of caustic allegations including a 200-billion-euro money laundering scandal through Estonian branch of Danske bank and multiple failed merger attempts in order to grapple with growing criticisms over the lender’s governance, executives of Deutsche Bank, the German multinational investment bank headquartered in Frankfurt, had been expecting a string of restrictions ahead from the US regulators on its Wall Street’s investment bank, at least three people with direct knowledge regarding the subject-matter had unveiled on Thursday, the 20th of June 2019.

Besides, the sources had also added that it was unlikely for Deutsche Bank to avert a US sanction even if it could pass through an annual financial health checkup. However, executives appeared to be optimistic over this year’s annual health check up after failing to pass last year, as the fifteenth-largest bank in the world had made wide-ranging reforms including its risk managements and capital planning processes, one of the sources familiar with the issue unveiled in terms of anonymity as the source was not authorized to speak about the matter on public.

Nonetheless, while a decision had still been pending on the German lender’s annual health checkup after witnessing four failures on last five checkups, adding that the borrower would respect Fed’s decision, a Deutsche Bank spokesman said, ““We cannot confirm any of the information as the results are not known to us.

We respect the process, and we will respect the Federal Reserve’s decision, when made”. In fact, even if the bank passes through the stress tests, it is unlikely that Fed would allow the lender to make payments to its German parent without approval, sources said.