Federal Reserve Fines Foreign Bank for Volcker and FX Violations
The Board of Governors of the Federal Reserve System ("FRB") announced two enforcement actions against Deutsche Bank AG for "unsafe and unsound" activities in the foreign exchange ("FX") markets, and for inadequacies in Volcker Rule compliance programs.
In one Order, the FRB identified deficiencies in the firm's oversight of FX traders that affected both the organization's proprietary accounts and customer accounts. In a separate Order, the FRB found significant gaps in the bank's Volcker compliance program alleging that the bank failed to "properly undertake certain required analyses concerning its permitted market-making related activities."
The two actions will result in a combined $156.6 million in civil money penalties.
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Federal Reserve Board Governor Daniel K. Tarullo argued that "strong capital requirements are central to a safe and stable financial system" and cited the Volcker Rule as an area where the "case for change has become fairly strong."
