FCA sees issues in Deutsche Bank controls over financial crimes, FT reports

Sun May 1, 2016 3:48pm EDT
 
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FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE: Quote) has "serious" and "systemic" failings in its controls against money laundering, terrorist financing and sanctions, according to a confidential letter by the UK's financial regulatory agency, the Financial Times reported.

The watchdog agency, the Financial Conduct Authority (FCA), has now ordered a separate independent review, the FT reported the letter as saying. The FCA declined to comment.

"Our overall conclusion was that Deutsche Bank UK had serious AML (anti-money laundering), terrorist financing and sanctions failings which were systemic in nature," the FT quoted the FCA letter, dated March 2, as saying.

"Effective senior management engagement and leadership on financial crime had been lacking for a considerable period of time."

Deutsche Bank said it is cooperating with regulators to fundamentally reform its anti-financial crime program.

"We understand the importance of this issue and are committed to and engaged in fixing it", a company spokesman said in an emailed statement on Sunday.

In late 2014, the FCA had put Deutsche Bank's London office under enhanced supervision owing to concern about the bank's governance and controls. Enhanced supervision procedures are normally kept private and can follow fines.

Following its review, the FCA ordered a so-called skilled persons report - also called a Section 166 report - to assess remedial work Deutsche must now carry out, the FT reported.

Deutsche Bank's new chief executive, John Cryan, who took over in July, has embarked on a deep restructuring of the bank, which includes an overhaul of governance procedures.   Continued...

 
A statue is seen next to the logo of Germany's Deutsche Bank in Frankfurt, Germany, January 26, 2016. REUTERS/Kai Pfaffenbach/File Photo