What's the German compound word for "Cannot catch a break"?
The Federal Reserve rejected the capital plan of Deutsche Bank Trust Corp. in the regulator’s annual stress test released Wednesday.
Oh Deutsche. between the rampant regulatory investigations, European upheaval and plunging stock price, you did not need this. How bad is it?
This marks the second consecutive year in which the Fed faulted the U.S. transaction banking and wealth-management unit of German banking giant Deutsche Bank AG in its annual review. Although the U.S. central bank found that the unit had enough capital to weather a severe economic downturn, it rejected Deutsche Bank Trust Corp’s capital plan for so-called qualitative reasons, citing “material unresolved supervisory issues.”
Among the deficiencies the Fed identified at the Deutsche Bank unit were an inability to properly measure risk and manage its data infrastructure.
Oh right. Those.
In fairness, Deutsche is being judged against way higher capital ratios that may or may not be totally realistic, but then again almost everyone else passed. And "everyone" we mean banks like Ally and Credit Suisse.
So what has Deutsche learned?
“The capital adequacy of Deutsche Bank Trust Corporation has never been in doubt,” said Bill Woodley, deputy chief executive of Deutsche Bank Americas, in a statement. He added that the bank would implement what it learned in this year’s exercise to strengthen its future capital plans.
We can feel the weltschmerz from here.