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The Fed is reportedly weighing fines for Deutsche Bank over the bank's insufficient anti-money-laundering controls

Business Insider logo Business Insider 5/30/2021 sbalogh@insider.com (Shannen Balogh)
a man wearing a suit and tie: Deutsche Bank CEO Christian Sewing Thomas Lohnes/Getty Images © Thomas Lohnes/Getty Images Deutsche Bank CEO Christian Sewing Thomas Lohnes/Getty Images
  • In recent weeks, the Fed has pressed Deutsche Bank to enhance its anti-money-laundering controls.
  • The Fed may resort to fines, the Wall Street Journal reported, citing sources familiar with the matter.
  • The bank has been under regulatory scrutiny for years, and its CEO has acknowledged that more work is needed.
  • See more stories on Insider's business page.

Tensions between Deutsche Bank and the Federal Reserve are rising.

In recent weeks, the Fed has told Deutsche Bank to address flaws in its anti-money-laundering controls, according to a report by the Wall Street Journal.

The Fed could end up fining the bank, the Journal reported, citing sources familiar with the matter.

While Deutsche Bank has said it's allocating significant resources to revamp its controls, the Fed says that the bank is actually backsliding.


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In 2017, Deutsche Bank paid a $41 million fine to the Fed over its anti-money-laundering practices.

Potential fines are the latest development in a years-long dialogue between the bank and the regulator. In 2018, the Fed classified Deutsche Bank's US operations as being in "troubled condition," one of the lowest classifications. In May 2020, it sent a letter to the bank saying that it had failed to improve past its "troubled" status.

Deutsche Bank passed the Fed's stress test for the first time in 2019, but its CEO Christian Sewing has recognized the bank's continued shortcomings.

"Are we there yet regarding our controls? The answer is no," Sewing said in prepared remarks at the bank's annual general meeting in 2020.

New York's Department of Financial Services fined Deutsche Bank $150 million last July in part due to its dealings with convicted sex offender and financier Jeffery Epstein. The DFS said that Deutsche Bank processed payments that should have been flagged through its compliance systems, including payments to people who were publicly alleged to have been connected to Epstein.

Even so, Deutsche Bank reported its most profitable quarter since 2014 in the first quarter this year, largely driven by its investment banking unit, an area where it's aggressively hiring.

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