US regulators ask Deutsche bank to clarify its “bad bank” proposal

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US regulators ask Deutsche bank to clarify its “bad bank” proposal

Over the weekend, the US regulators had asked the German lender, Deutsche Bank AG regarding its proposal, dubbed as “bad bank” alongside impacts of the proposal on loss-making ventures of Deutsche Bank in the United States, a Financial Times report published on Monday, the 24th of June 2019 had revealed.

Latest subpoena of US regulators came after a day, a Deutsche Bank spokesman had been quoted saying that the German Bank was unlikely to be allowed to operate in Wall St., even if it passed the annual stress test, after failing four among the last five.

Besides, the spokesman had also said that the German lender would not be allowed to channel money from United States to its parent headquarter in Frankfurt, Germany. However, as the lender might have been planning for a shift from investment banking in US, concerned officials at US Federal Reserve had asked Deutsche Bank about its strategy on “bad bank” proposal and further details.

In point of fact, earlier this month, multiple media headlines had reported that the Frankfurt-based lender had been planning to revamp its trading operation at Wall St. by creating a strategy, which it named as “bad bank”, in order to hold tens of billions of euros in non-core assets.