Germany orders Deutsche Bank to do more to prevent money laundering

Germany orders Deutsche Bank to do more to prevent money laundering

Deutsche Bank Headquarters

Photo by Hannelore Foerster

German financial regulator BaFin ordered German Bank to enact new guarantees to prevent money laundering, BaFin said Friday, a blow to the country’s largest lender as it tries to repair its reputation.

In 2018, BaFin took the extraordinary decision to install the KPMG auditor as a special monitor at Deutsche to monitor the progress of money laundering controls.

It was the first time that the German regulator had made such an appointment and followed a series of money laundering bankruptcies.

Today, BaFin is expanding the mandate of KPMG.

BaFin said in a brief statement that it wanted improved controls, especially with regard to “regular customer reviews”, also applying to correspondent banks and transaction monitoring.

The news comes after a good week for Deutsche. It posted its best quarterly profit in seven years – after years of losses – and its share price hit its highest level in three years.

Deutsche Bank said in a statement that it was improving its controls but “we are also aware that there is still work to be done”.

“The order is the result of a constructive prudential dialogue with BaFin and shows that the bank continues to attach the highest priority to detecting and correcting possible weaknesses in the supervisory processes,” Deutsche Bank said. .

“We are working intensively to also comply with the new requirements on time,” Deutsche said.

Under the leadership of CEO Christian Sewing, Deutsche Bank has tried to turn a new leaf by restoring its profitability and reputation after a series of wrongdoing.

In 2017, Deutsche Bank was fined nearly $ 700 million for authorizing money laundering. The fines stemmed from an artificial trading system between Moscow, London and New York City that officials said had been used to launder $ 10 billion outside of Russia. The US Department of Justice is still investigating the case.

Last year, Deutsche Bank was also sanctioned by New York regulators for ignoring warning signs when processing billions of euros in payments for Danske Bank, whose Estonian branch was embroiled in a scandal of money laundering.

BaFin said in another email that it was looking to “make lasting improvements in money laundering prevention at Deutsche Bank”.

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