facilitation at Deutsche Bank: For the second Time in a row, the Institute passes the crisis test, the US overseer. However, the Central Bank, the Fed also has bad news for the big banks.
Washington/Frankfurt (Reuters) - After years of problems in the US business, Deutsche Bank has passed now, again, the stress test of the Central Bank, the Fed.
"In the second year in a row, our most important Supervisory authority in the USA had neither quantitative nor qualitative objections to the capital planning" of the US subsidiary, wrote to the U.S. Head of the largest German money house, Christiana Riley, and the group chief Executive, Christian Sewing, in a Memo to employees.
"This is a good news and an important step forward. It is further proof that we are progressing with the Transformation of our Bank, as planned." Sewing was brought in July 2019, a fundamental realignment of the group on the way: thousands of Jobs to be deleted, the investment banking division was trimmed, the U.S. business is newly established. "We will not slacken in our efforts," insured the two managers. "We will continue to improve our processes and controls."
However, the Finance granted to the overseers of the largest money houses in the United States in the light of the Corona-crisis strict requirements for the protection of the capital equipment. Profit distributions through share repurchases and dividend increases are, therefore, at least until the end of September taboo, such as the Federal Reserve on Thursday (local time) announced in Washington.
Although the Fed all of the 33 banks tested exhibited a good testimony, was the stress test for the industry and, ultimately, more of a bitter pill. For an analysis of the possible loads due to the Corona pandemic have placed risks have to be disclosed, said the Central Bank. The Fed will therefore take further measures to check the crisis, strength-intensive. Because of the uncertainty, the banks need to keep your money in the next few months of that put together.
Although Fed Vice Randal Quarles praised the money of the houses: "The banking system in this crisis so far a source of strength." Nevertheless, the Fed wants to keep the big banks in the views. Due to the risk of huge loan losses, the Fed wants to be on the safe side. Therefore, the banks have plans of their Capital, the dividends and share buybacks as it relates to later this year, re-submit.
The strict requirements of the Central Bank for the financial sector show how seriously the Fed takes the risks of the pandemic. The Corona-crisis had subsided, the US economy temporarily already largely come to a halt and unemployment will rapidly increase. The pandemic is not yet over, though the Lockdown was relaxed measures in many places. On the contrary, Recently, the case numbers have increased in many U.S. States again significantly.
for Deutsche Bank, the regulations of the Fed could have indirect consequences. Unlike the US rivals of foreign money houses do not depend, in the case of the daughters of the dividends and share repurchases, the approval of the Fed, but the profit distributions to the parent company.
The stress tests of the US-based Bank are a consequence of the financial crisis of 2008. They should ensure that banks do not need to be saved in case of a collapse of the financial market with tax money.
© dpa-infocom, dpa:200625-99-569142/5Updated Date: 29 June 2020, 13:34