Deutsche Bank fell through second part of US stress test of major financial institutions. The test partially revealed “significant weaknesses” in US subsidiary of largest Deutsche Bank, US Federal Reserve shared.
Deutsche Bank in USA is not sufficiently prepared for crisis situations in its planning and internal procedures. According to Federal Reserve, “widespread and dubious deficits” have been identified in all areas of capital planning.
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Among or things, Federal Reserve stated serious shortcomings in data processing, predictions about revenue and losses, and internal control systems. These weaknesses aroused concerns about ability of Deutsche Bank subsidiary to “define its capital needs on a forward-looking basis”.
Deutsche Bank stated that it had invested extensively in order to improve its capital planning as well as its controls and infrastructure. DB USA Corporation has already made progress. It will continue its efforts and continue to cooperate with supervisory authorities, bank shared.
Stress tests in response to financial crisis
The first round of load test, results of which had been published a week ago, was still expected by Deutsche Bank. The bank’s capital reserves were evaluated. In second part, most experts expected that bank would not persuade supervisors. The institute had already fallen 2015und 2016.
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Wher negativeTest could cause Deutsche Bank to continue to drive its presence in USA even furr than planned already, Istunklar. Additional changes in US seem jedochunausweichlich. David Hendler, analyst of consulting firm Viola RiskAdvisors, compared Deutsche Bank with an airplane, “Nota is safe because its systems do not work. Wiekann a bank that is one of largest trading addresses in world, does not have minimum security measures? This is already amazing. ” It is not least task of European supervisors to monitor bank more closely. “Esscheint almost as if y didn’t want to take responsibility for bank and let Fed play bad boy,” Hendler said.
The stress tests had been introduced in response to financial crisis of 2008. They are part of so-called Dodd-Frank reforms, which arm financial sector against furr crises, thus preserving US taxpayers against costly bank bailouts. If an institute does not have CCAR test, dieFed can Dividenzahlungen or share buy-back programs of Instituteverweigern. Foreign banks may n pay KeinKapital to ir parent companies.
Deutsche Bank is part of group of institutes that are particularly closely controlled by by supervisors because of ir size, ir networking within DesFinanzsystems and ir business. A few years ago, DerInternationale Monetary Fund had referred to Frankfurt Institute Sinngemäßals Riskiest Bank in world. Especially ihrDerivatebestand in so-called trading book, many Expertenals is very risky.
US president Donald Trump, with argument of “excessive over-regulation”, had recently initiated a softening of se rules, which, among or things, would relieve small and medium-sized banks from stress tests. However, large banks should continue to be tested. The 35 institutes now under investigation represent 80 percent of all financial institution assets in United States.
