On Wednesday, July 19, the US Federal Reserve Board levied a fine of $186 million on Deutsche Bank for failing to fix “unsafe and unsound practises” that the bank regulator had pointed out in 2015 and 2017.
The Fed questioned Deutsche Bank’s controls on sanctions compliance, transaction monitoring, and anti-money-laundering systems in a consent order issued on Wednesday. In 2015 and 2017, the US regulator fined the German lender $99 million for similar violations.
“The Board issued a consent order and a $186 million fine based on unsafe and unsound practices and violations of the Board’s 2015 and 2017 consent orders with Deutsche Bank relating to sanctions compliance and anti-money laundering controls. The Board found that Deutsche Bank made insufficient remedial progress under the 2015 and 2017 consent orders and had deficient anti-money laundering internal controls and governance processes relating to its prior relationship with the Estonian branch of Danske Bank,” the consent order reads.
The consent order issued by Fed mandated Deutsche Bank to prioritise the completion of numerous essential Board orders.
In addition, the Board announced a Written Agreement to address other general governance, risk management, and control issues at Deutsche Bank.
Meanwhile, the Deutsche Bank issued a statement saying that they are committed to risk management programs with “emphasis on Anti-Financial Crime and Compliance controls.”
The Deutsche Bank said that it was “positioned to meet regulator expectations” and that the issues would be resolved in the near future. It further added that the imposed punishment is largely covered by prior quarter provisions, with the remaining being within the bank’s disclosed cost range for the second quarter.
The imposition of a $186 million fine came after the Deutsche Bank paid approximately $630 million in 2017 to end US and UK investigations into Russian equity trading. In the same year, the German lender was fined $41 million for failing to comply with anti-money laundering regulations.