Fed to probe DB over 'bad bank' proposal - reports

Monday, 24. June 2019 07:19

The Federal Reserve will question Deutsche Bank AG over its proposals to shrink or close down large parts of its trading business outside Europe, the Financial Times reported on Monday citing sources familiar with the matter.

The media outlet previously reported that the German lender was preparing to set up a so-called "bad bank" that would have up to €50 billion in assets. However, its sources said that officials at the Federal Reserve had in recent days spoken with key figures at the bank to request further information on its plans. They were reportedly concerned about the strategy due to the uncertainty that it would cast over the bank's entire United States portfolio. The sources added that the Federal Reserve needed to know how the change would affect the German bank's operations.

The reports come as Deutsche Bank faces increasing scrutiny over its activities in the US. Recent reports indicated that US federal and state authorities were investigating it for money laundering and other potential misconducts while a group of Democratic senators previously demanded that its transactions with President Donald Trump likewise be looked into. In addition, the bank's Chief Operating Officer for the Americas resigned at the beginning of the month.

Related Links: Deutsche Bank AG
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Breaking the News / DZ