Deutsche Banks primary regulator in the US has found serious problems with the banks financial reporting procedures and oversight, a lawyer briefed on the matter said.
Jordan Thomas, a lawyer who represents a former Deutsche Bank risk analyst who filed a whistle-blower claim against the bank, said that regulator, the Federal Reserve Bank of New York, sent a letter in December to officials at the German bank notifying them of the findings of its review.
Mr. Thomas said he had seen a copy of the letter and it directed Deutsche to fix problems in its financial reporting procedures problems the letter said had existed for
The letter coincided with a push by United States regulators for banks, especially ones based overseas, to be held to the same capital requirements as American banks. The Fed wanted the tougher measures to avoid a need for future taxpayer bailouts of financial institutions in the event of another financial
Deutsche Bank, one of Europes largest banks, was a forceful opponent of the Feds push to force foreign banks to comply with the same capital requirements as domestic banks.
Officials from Deutsche Bank argued that the Feds requirement was too restrictive.
This year, the Fed went ahead with those tougher capital requirements for foreign banks. But it gave most of them until the middle of 2016 to comply.
In a statement, Deutsche Bank declined to comment on the letter, which was reported earlier by The Wall Street Journal. A bank spokeswoman said on Tuesday that it had been working for months to stiffen its operations.
We have been working diligently to further strengthen our systems and controls and are committed to being best in class, said Michele Allison, a Deutsche Bank spokeswoman, who added that the bank was spending more than $1.3 billion and employing 1,300 people toward this effort.
American depositary receipts of Deutsche Bank fell nearly 3% in late trading on the New York Stock
For years, Deutsche Bank officials have steadfastly denied the accusations that the bank deliberately mispriced assets to conceal the magnitude of its losses during the