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By Michelle Price
WASHINGTON (Reuters) – The North American subsidiary of Deutsche Bank failed in the second part of the Federal Reserve's annual stress tests on Thursday "material weaknesses" in its data and control resources capital planning.
Unanimous opposition to Deutsche Bank's investment plan in the United States marks a new blow to the German bank whose financial health is under surveillance
Deutsche Bank has pbaded the first stage Fed test, which measures its capital levels against a severe recession scenario last week.
The second part of the Fed's test focuses on "Concerns include significant weaknesses in the company's data capacity and controls that support its capital planning process, as well as weaknesses in its approaches and its premiums. "
"Although the failure of the test should not affect the ability of banks to pay dividends to shareholders, Deutsche Bank will have to make changes to its operations," the Fed said in a statement
.
This also means that the bank can not make any distributions to its German parent company without the approval of the Fed.
The recently opened American subsidiaries of six foreign creditors, Deutsche Bank, Credit Suisse, UBS Group, BNP Paribas, Barclays and Royal Bank of Canada were tested for the second time this year and their results were made public for the first time. first time.
Deutsche Bank covers DB USA, a holding company with $ 133 billion in badets, according to Deutsche Bank's March documents. This includes all non-affiliated badets of Deutsche Bank in the United States, including its mortgage and debt financing subsidiary, as well as its substantial brokerage business on Wall Street.
CONDITIONAL APPROVALS
The Fed, on the other hand, approved the capital plans of 34 institutions, allowing them to use additional capital to buy back shares, dividends and other purposes.
These include names such as JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co.
The country's largest regulator said it had approved conditions for the investment plans of Goldman Sachs Group and Morgan Stanley, whose capital levels were negatively affected. test, by changes in the US tax code.
(By Michelle Price)
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