Deutsche Bank’s board of directors said it was willing to accept financial losses because the bank was in trouble with oversight over the widespread use of private communication channels among employees, the Bloomberg news agency wrote on Thursday, citing people familiar with the matter. A company spokesman declined to comment.
The money house is one of several financial companies being investigated by the US authorities for using private communication channels that cannot be archived. The bank recently introduced a new app that enables messages to be retrieved from company cell phones.
Deutsche Bank and other money houses with US stress test without problems
According to estimates by the Federal Reserve (Fed), the largest financial institutions in the USA have crisis-proof capital resources. All 34 major banks passed the financial regulators’ annual stress test, the Fed announced in Washington on Thursday. Deutsche Bank also had no problems with its US subsidiary during the stress test using simulated crisis scenarios. With the endurance test, the central bank supervisors want to ensure that lending to companies and households does not come to an abrupt halt in the event of a financial market collapse.
The US Federal Reserve’s stress tests are a consequence of the financial crisis of 2008. They are intended to ensure that banks are prepared for emergencies and do not have to be rescued again with taxpayers’ money. The Fed examines whether the capital reserves are sufficient to withstand extreme stress such as a rapid increase in unemployment or a rapid collapse in real estate prices. For many of the big banks, the annual audit is crucial to being able to distribute money to investors in the form of dividends or share buybacks. From Monday they are allowed to publish their capital plans.
Due to the Corona crisis, the Fed had checked the financial institutions’ balance sheets particularly meticulously in recent years and at times imposed strict conditions on the preservation of cash reserves. Share buybacks and dividend increases were temporarily taboo or tied to strict conditions. In the meantime, Deutsche Bank had a difficult time with the supervisors with its US business and failed the stress test several times from 2015 to 2018. Unlike its US rivals, the dividends and share buybacks of subsidiaries of foreign money houses do not depend on the test result, but the profit distributions to their parent companies do.
Deutsche Bank shares fell to EUR 8.29 via XETRA in the morning, but turned into profit over the course of the day and are now temporarily listed 4.73 percent higher at EUR 8.92.
FRANKFURT / WASHINGTON (dpa-AFX)
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