The Federal Reserve Bank of New York unearthed serious shortcomings in Deutsche Bank’s US operations, such as poor financial reporting, fragile technology and insufficient auditing and oversight.
Regulators allege that the bank willingly failed to fix the problem, which has been existing for years, as reported by The Wall Street Journal (WSJ).
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A letter written in December by a senior official of the New York Fed was cited by the WSJ as saying, "the bank’s U.S. arms "are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm’s entire U.S. regulatory reporting structure requires wide-ranging remedial action."
According to the letter, Deutsche Bank had made "no progress" at fixing previously identified problems. It said examiners found "material errors and poor data integrity" in its US entities’ public filings, which are used by regulators, economists and investors to evaluate its operations.
The NY Fed Reserve has ordered Deutsche Bank to implement necessary measures to fix the problem.
A Deutsche Bank spokesman was quoted by The WSJ as saying, "We have been working diligently to further strengthen our systems and controls and are committed to being best in class."
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By GlobalDataAs part of this the bank is investing 1bn ($1.35bn) globally and appointing 1,300 people, including about 500 compliance, risk and technology employees in the US.
Deutsche Bank is also under the scanner of New York State Department of Financial Services for possible forex manipulation and Iran sanctions violations.
