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United Kingdom watchdog puts pressure on Deutsche bank

According to the Financial Times, the United Kingdom financial regulator has censured the Deutsche Bank for failing to upgrade its compliance and anti-money laundering controls, warning them of a potential ban from the United Kingdom market post-Brexit. The German lender now needs to update the Bank of England on a weekly basis rather than a quarterly basis. 

Finance News tweeted regarding this:

The Deutsche Bank was first admonished and placed under special observation by the Financial Conduct Authority for “serious” and “systemic” failings four years ago due to money laundering, terrorist financing, and sanction breaches. This is raising concerns among regulators. The Deutsche has been tracked and monitored by the Bank of England’s Prudential Regulation Authority (PRA) and FCA since 2015. 

Separately, the German regulatory authority, BaFin has opened an investigation into Deutsche’s compliance with reporting requirements and other rules of conduct. Both the financial regulators have informed Deutsche regarding the possibility of a delay in its post-Brexit reauthorization if enhancements in compliance are not noticed soon. Deutsche, which is a non-British bank, depends on the European Union passport rights to function in the United Kingdom, and it needs a reauthorization to do so following Brexit. 

Due to the gaps in anti-money laundering and other financial controls, the Deutsche Bank has been repeatedly targeted by regulators in the United States, Germany, and other countries. In previous proceedings against money laundering violations, Deutsche Bank has already paid around $700m in US and UK fines. 

A Deutsche Bank spokesperson reported that as an attempt to improve their platform, they had tripled the number of staff in its anti-financial crime division since 2015. He stated, 

“The stability and security of our platform are clearly vital to us and we are allocating significant resources to this area to ensure this,”

The spokesperson refused to comment on Deutsche’s interaction with financial regulators but said it was in close coordination with them.