U.S. banking regulators have ordered Deutsche Bank AG to improve its compliance systems and risk controls, the Wall Street Journal said.
The report Thursday cited an agreement Deutsche Bank entered into with the Federal Reserve Bank of New York and New York’s Department of Financial Services.
A memorandum of understanding (MOU) requires the bank to overhaul its technology and compliance procedures and fix risk-management deficiencies, according to the report.
Deutsche Bank is also being pressed by the Commodity Futures Trading Commission to improve its internal systems. The CFTC wants the bank to fix systems used to report transactions reporting because such errors pose a risk to the bank and its trading partners, the WSJ said.
In the U.S. financial services industry, an MOU negotiated between an institution and regulators indicates that the bank, while not admitting any wrongdoing, will refrain from a practice deemed unsound and take action to correct it.
Last December, Deutsche Bank received a letter from the New York Fed, which described financial reports produced by some of the bank’s U.S. divisions as “low quality, inaccurate and unreliable.”
The U.S. Commodity Futures Trading Commission has pressed Deutsche Bank to fix transaction-reporting problems that magnify risks to the bank and potentially its trading partners, the WSJ said.
The New York Fed set a mid-2015 deadline for Deutsche Bank to correct the problems.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.