Finance: Trouble for Deutsche Bank US operations
The Federal Reserve Bank of New York has found serious problems in Deutsche Bank's US operations, including shoddy financial reporting, weak technology and inadequate auditing and oversight, it was claimed.
In a letter to the German lender's executives last December, a senior official with the New York Fed described financial reports produced by some of the bank's US divisions as "low quality, inaccurate and unreliable", a source said.
The New York Fed, as the US central bank's eyes and ears on Wall Street, directly supervises the biggest US and foreign banks, partly through embedded regulators who go to work each day inside the banks. "The size and breadth of errors strongly suggest that the firm's entire US regulatory reporting structure requires wide-ranging remedial action," the letter, first reported by the 'Wall Street Journal', said.
Deutsche Bank shares lost 1.8pc in early trading yesterday, the biggest decliners on both Germany's blue-chip index and among the European banking sector, on fears that US regulators could take action against the bank.