(Enters responses from Deutsche Bank, New York Fed)
July 22 The Federal Reserve Bank of New York has
found serious problems in Deutsche Bank AG's U.S.
operations, including shoddy financial reporting, inadequate
auditing and oversight and weak technology, the Wall Street
In a letter to the German lender's executives last December,
a senior official with the New York Fed described financial
reports produced by some of the bank's U.S. arms as "low
quality, inaccurate and unreliable," the report said.
"The size and breadth of errors strongly suggest that the
firm's entire U.S. regulatory reporting structure requires
wide-ranging remedial action," the Journal said, quoting
documents reviewed by it. (on.wsj.com/1r3VIn3)
The Dec. 11 letter said the bank had made "no progress" at
fixing previously identified problems, WSJ said.
"We have been working diligently to further strengthen our
systems and controls and are committed to being best in class,"
a Deutsche bank spokeswoman told Reuters in an email.
"As announced in 2013, we are investing 1 billion euros as
part of this effort, and we have appointed 1,300 colleagues to
focus on it as part of a dedicated program."
A New York Fed spokeswoman declined to comment.
This was a "systemic breakdown" and "expose the firm to
significant operational risk and misstated regulatory reports,"
according to the letter from Daniel Muccia, a New York Fed
senior vice president responsible for supervising Deutsche Bank.
The New York Fed, as the U.S. central bank's eyes and ears
on Wall Street, directly supervises the biggest U.S. and foreign
banks in part with the use of embedded regulators who go to work
each day inside the banks.
The letter ordered senior Deutsche Bank executives to ensure
steps were taken to fix the problems. It also said the bank
might have to restate some of the financial data it has
submitted to regulators, the Journal reported.
(Reporting by Avik Das in Bangalore; Editing by Joyjeet Das)