German Regulator Warns Deutsche Bank Over Money-Laundering, Appoints Auditor

Deutsche Bank has been directed to put in more effort by the financial regulator of Germany to prevent incident of money-laundering and “terrorist financing,” and has also directed the appointment of an independent auditor to monitor the progress of the efforts being made by the bank

BaFin, the German financial regulator announced on Monday that such as appointment of an independent auditor related to money laundering being conducted in a bank is the first such instance. This move coincides with efforts of other financial regulators in Europe to enhance the security mechanisms in banks of the region to effectively deal with their customers after a number of scandals have surfaced in recent times.

Of the most recent incidents is the resignation of the boss of Denmark’s biggest lender, Danske Bank, last week following an independent investigation in the activities of the bank that revealed suspicious payments of almost 200 billion euros which were made through its branch in Estonia. .

Deutshe Bank was slapped a fine of almost $700 million last year over allegations of permitting money laundering. The German bank has said in a statement that it agreed to the comments and measures made by BaFin about the requirement for the bank to enhance its systems and processes for proper identification of its customers.

“We have the strong commitment to operate within regulatory-compliant practices for the identification of our clients,” Deutsche Bank said. No details of the new measures the bank would adopt were however provided by BaFin ot Deutsche Bank.

According to reports in the media, the move and comments by BaFin on Deutsche Bank were not based on revelation of any new scandal or case.

There were reports in the media in August about Deutsche Bank itself finding out and identifying certain shortcomings in its capacity to complete and comprehensive identification of the customers and the source of their money that they were putting into the bank. To ma\ke assessment of the progress being made by Deutsche Bank, KPMG has been appointed as special representative of BaFin for a three-year period, said the German financial regulator.

This intervention by the German regulator is another blot in the reputation and credibility of some of the largest banks in Europe. In recent times, Deutsche Bank has engaged in a major strategic overhaul of its business which has resulted in thousands of retrenchments and reduction in the global operations of the bank in an attempt by the bank to recover from three straight years of losses.

Following allegations of artificial trades between Moscow, London and New York which, according to authorities, had led to money laundering to the tune of $10 billion out of Russia, Deutsche Bank had agreed to pay a fine of $630 million to US and British regulators in January. In May of 2017, an additional fine of $41 million was imposed on the bank by the US Federal Reserve for failing to implement systems that could identify instances of money-laundering.

(Adapted from


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