Sunday

18th Nov 2018

Deutsche Bank under fire in the US

  • Deutsche Bank was involved in a series of scandals over the past few years (Photo: orkomedix)

Two separate reports by the US central bank and the Senate have criticised Deutsche Bank for having internal irregularities and for helping investment funds to avoid taxes.

Documents obtained by the Wall Street Journal show that Germany's largest commercial bank has produced "low quality, inaccurate and unreliable" reports to the Federal Reserve Bank of New York.

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"The size and breadth of errors strongly suggest that the firm's entire US regulatory reporting structure requires wide-ranging remedial action," the Fed paper concludes.

Separately, an investigation by the US Senate into the dealings of Deutsche Bank and Barclays, two of Europe's largest banks, concluded on Tuesday (22 July) that they have sold complex financial products which allowed hedge funds to avoid US taxes.

The scheme has cost the US government billions of dollars in tax revenues, according to the Senate report, which does not say that Deutsche Bank has done anything illegal.

The two probes are only the latest in a series of scandals and legal disputes, notably fraud and rate fixing, which have seriously dented the image of Germany's largest commercial bank and weighed on its profits.

Back in January, Deutsche Bank posted losses of €1.15 billion for the previous three months due to heavy costs for litigation and restructuring and warned that in 2014 more of this will happen.

Fresh corruption scandal engulfs Deutsche Bank

After being fined for rate-fixing and convicted for deceiving customers, Deutsche Bank finds itself embroiled in a new scandal: hiring the offspring of Chinese politicians in return for contracts.

Scandals drain Deutsche Bank's coffers

Germany's largest bank posted €2.2 billion losses in the last three months, largely due to a series of investigations into alleged fraud, tax evasion and rate-rigging. Its new management promises a "change of culture."

Analysis

Deutsche Bank crisis tests EU regulation

EU finance ministers insist that the bank's losses are not a systemic threat, but they revive the debate about the safeguards put in place after the financial crisis.

Italy defiant on budget on eve of EU deadline

Italy would be committing economic "suicide" if it fell in line with EU rules, its deputy leader has said, in a sign that Rome has little intention of bowing to pressure ahead of Tuesday's budget deadline.

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