Tags: Deutsche Bank | Santander | Federal Reserve | Stress Tests

Deutsche Bank, Santander May Fail Fed's Stress Tests, WSJ Says

Sunday, 22 February 2015 05:46 PM

Deutsche Bank AG and Banco Santander SA are among European banks that probably will fail Federal Reserve stress tests of their U.S. operations this year because they’re not good enough at measuring their risks, the Wall Street Journal reported, citing people familiar with the matter.

While the tests probably will find that Deutsche Bank Trust Corp. has adequate capital, the unit likely will receive a warning about that quality of its processes, according to the report. The bank already is in a remediation process with the Fed over how it handles matters like regulatory reporting, risk control, and compliance, the report said.

“Deutsche Bank Trust Corporation, which represents less than 5 percent of Deutsche Bank AG’s total assets, was pleased to participate” in the Fed tests,’’ Michele Allison, a spokeswoman for Deutsche Bank in New York, said in an e-mailed statement. “We will know our results after the Federal Reserve’s announcements on March 5 and March 11.”

Santander’s U.S. unit also probably will fail because of the quality of its processes even though its capital is likely to be adequate, the Journal reported. Peter Greiff, a spokesman for Santander, declined to comment, as did Eric Kollig of the Fed.

While Deutsche Bank is undergoing its first Fed test this year, it would be the second straight failure for Madrid-based Banco Santander’s U.S. unit. U.S. units of Royal Bank of Scotland Group Plc and London-based HSBC Holdings Plc also had their capital plans rejected by the Fed last year.

The U.S. units of Deutsche Bank and Banco Santander probably would be restricted from paying dividends to their European parents or other shareholders if they fail the test, the Journal reported. Santander already is under such a restriction, the newspaper said.


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Deutsche Bank AG and Banco Santander SA are among European banks that probably will fail Federal Reserve stress tests of their U.S. operations this year because they're not good enough at measuring their risks, the Wall Street Journal reported, citing people familiar with...
Deutsche Bank, Santander, Federal Reserve, Stress Tests
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2015-46-22
Sunday, 22 February 2015 05:46 PM
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