Feds Concerned as Deutsche Bank Plans to Create ‘Bad Bank’, Cut Operations in US – Reports | WHAT REALLY HAPPENED


Feds Concerned as Deutsche Bank Plans to Create ‘Bad Bank’, Cut Operations in US – Reports

The German bank, mired in money laundering allegations and years of struggling to generate sustainable profits, is planning a massive overhaul of its trading operations to switch focus from risky investment banking, as reports earlier suggested. It is expected to create a so-called bad bank for toxic assets and curtail its offices abroad.

Officials from the US Federal Reserve have quizzed a senior executive from Deutsche Bank over its reported restructuring plans, which include creating a “bad bank” for non-core assets and curtailing its units abroad, The Financial Times reports.

According to the outlet, citing several people, acquainted with the situation, officials sought to address concerns that the move would affect the German financial behemoth’s US operations. One of the insiders pointed to the uncertainty over Deutsche Bank’s entire US portfolio.

“There are lots of rumours swirling around about the scale of the cuts the bank is going to make. The Fed needs to know from Frankfurt how this is going to change its US operations”, a person with knowledge of the discussions between US officials and the bank’s management noted.

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