Deutsche Bank has been released from a consent order linked to a foreign exchange scandal that started in the mid-2010s. The Federal Reserve announced the end of the order on August 14, 2023. This marks the conclusion of a nine-year oversight period. The order had imposed a $137 million fine on the bank and required enhanced compliance measures.
Key Details
The consent order was the last remaining consequence for Deutsche Bank from the scandal. This scandal involved claims of collusion among several banks to manipulate foreign currency interest rates. Former U.S. Assistant Attorney General Bill Baer said, "Deutsche Bank secretly conspired with its competitors to rig the benchmark interest rates at the heart of the global financial system." Other banks involved in the scandal included JPMorgan Chase, Citi, Barclays, and UBS.
Background
Besides the FX scandal order, Deutsche Bank faced a separate consent order in 2017 for not complying with the Volcker Rule. This rule restricts proprietary trading. That order was ended in 2020. Deutsche Bank did not comment on the latest termination from the Federal Reserve.
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The end of the consent order could improve Deutsche Bank's compliance outlook. This may ease regulatory burdens. Investors might see this as a positive change for the bank's operational flexibility and risk profile.
Watch for Deutsche Bank's upcoming earnings report. It may provide more insights into its financial health and operational strategy after this regulatory change.
Based on reporting by: americanbanker.com