Deutsche Bank: Legal risk control uncertainties abound


It seems that Deutsche Bank is having a hard time moving on from their past mistakes. They’ve again come under fire from the Financial Conduct Authority, this time for serious failings in their anti-money laundering controls.


The financial watchdog has come down hard on Deutsche Bank for doing too little to solve the problem of money laundering within its organisation. In fact, the FCA reportedly informed the German banking giant that the senior management has been lacking in engagement and leadership on financial crime, including money laundering, terrorist financing and sanctions failings for a considerable period of time.

A startling example of this is that an estimated $10 billion US Dollars (£6.9 billion) in suspicious trades were discovered in the bank’s Russian offices.

Following the Financial Conduct Authority’s findings, they have now ordered an additional, independent review of Deutsche Bank. Depending on the outcome, it could potentially be followed by an enforcement investigation and considerable fines.

Of course, it was just last year when the bank was fined £1.7 billion by American regulators for rigging Libor rates and it seems they’re having a tough time moving onwards and upwards from that discovery.

Speaking of last year, it was then that efforts were made to ensure higher operating standards within Deutsche Bank, including a review of their “Know Your Client” scheme and all their client intake procedures.

Their goal at that time was to increase transparency and maintain sustainable client relations through tightening internal policies and suspending the addition of new clients. The bank also began introducing new products in areas that were most at risk.

For their part, Deutsche Bank has acknowledged these most recent findings of the Financial Conduct Authority. They have stated that they understand the severity of the issue and are committed to fixing it. Whether they are now more committed to bringing about change than they were last year remains to be seen.

Of course, this is all incredibly bad timing for Deutsche Bank and their leader, John Cryan. With the efforts to boost profitability and revamp the bank, another review isn’t welcome news.


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