New York federal regulators have found serious problems in the United States operations of Deutsche Bank A.G., including shoddy financial reporting, weak technology and inadequate auditing and oversight, Reuters reported Thursday.
In a letter to the German lender in December, a senior New York Fed official said financial reports produced by some of the bank’s US divisions were “low quality, inaccurate and unreliable”, the report said, citing sources familiar with the letter.
The letter called for wide-ranging remedial action.
Deutsche said it is investing 1 billion euros (US$1.4 billion) to upgrade its internal systems, including the quality of its reporting, with about 1,300 people working on the improvements.
The New York Fed’s concerns are unrelated to an investigation by the New York State Department of Financial Services into possible foreign currency manipulation and Iran sanctions violations by the German lender, the report said.
Technical issues were at the heart of the reporting problems, meaning Deutsche is likely to have to add or change any documentation it puts out, such as statements on its performance, but not face large fines.
Germany’s largest bank has been under US regulatory scrutiny for some time over a host of issues, including those related to the financial crisis and criticism that it is too thinly cushioned against potential losses.
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