BaFin, Germany’s financial regulator, has placed an order
German Bank AG
to take it a step further protection against money laundering, showing still finding shortages in the bank was repeatedly reprimanded for a lack of proper controls.
In a brief statement on its website late Friday, BaFin said banks should “further adopt appropriate internal safeguards and comply with due diligence obligations, particularly with regard to regular customer reviews,” adding the same applies to correspondent relations and monitoring of transactions.
It said it was expanding the role of the monitor it appointed in 2018 to see implementation. That year, BaFin appointed KPMG for the job.
In a statement, Deutsche Bank said it had significantly increased its control, adding that it had spent about $ 2.4 billion and raised its anti-money laundering team to more than 1,600 over the past two years.
“But we are also aware that there is still work to be done,” the bank said.
Deutsche Bank has run into a series of problems with regulators in the past. It has paid fines in the US for failing to monitor it properly dealt with late financier and convicted sex offender Jeffrey Epstein and for its role as a correspondent bank for Danske Bank Estonia branch A / S, through which an estimated $ 230 billion has flowed from Russia and other former Soviet countries over the years with minimal oversight.
It also has US monitors as part of a 2017 settlement with authorities related to “mirror trading,” where the bank moved $ 10 billion in Russian client money abroad.
Under the leadership of the Chief Executive Officer of Christian Sewing, the bank is eager to demonstrate that this problem is behind it. Earlier this week, it reported its strongest quarter in seven years, and revealed that unlike many other rivals, it was escaped the explosion of Archegos Capital Management thanks to rigorous risk assessment.
Mr. Sewing has revamped the bank which includes sharp cost cutting and a refocus on client service, particularly in its home country, Germany. However, that doesn’t mean banks aren’t willing to take risks.
In November, The Wall Street Journal reported that there had been tensions between US monitors and banks over possible expansion plans in Russia. Thought the US watchdog the risks of doing business with Russian clients too big, and the bank should close the business instead.
Write to Patricia Kowsmann at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8