And also that it has T-minus 12 months to makeover itself into an “After” bank (the “Before” being a pile of used tires left on the side of the road) and the clock starts now.
Deutsche Bank under fire from U.S. regulators over what they see as weak systems and financial controls, has been formally ordered to clean up its act as part of a confidential pact with the authorities, according to people familiar with the agreement. The private “memorandum of understanding” with the Federal Reserve Bank of New York and New York’s Department of Financial Services demands that Deutsche Bank overhaul its technology and compliance procedures, and fix what the regulators describe as serious risk-management deficiencies, according to people familiar with the accord. The MOU, which hasn’t been previously reported, took effect in 2012 and is still in place, according to the people familiar with the agreement. There’s no indication that regulators plan to escalate the MOU with Deutsche Bank or restrict its business activities, and it isn’t known how long the agreement will remain in place. However, the New York Fed has set a mid-2015 deadline for Deutsche Bank to correct a list of high-priority issues, people familiar with the matter said. The consequences of missing the deadline aren’t known.