European regulators fear Deutsche Bank U.S. stress test failure - source

Credit: Reuters - Business (Amazon FireT
Published on May 1, 2019 - Duration: 01:36s

European regulators fear Deutsche Bank U.S. stress test failure - source

Deutsche Bank is in danger of failing U.S. stress tests, a European bank supervisor told Reuters, adding to pressure on the German lender in a week where Donald Trump sues, and a week after its merger talks with Commerzbank founder.

David Pollard reports.

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European regulators fear Deutsche Bank U.S. stress test failure - source

A week of woes continues for Deutsche Bank ... As a European banking supervisor tells Reuters it's in danger of failing US stress tests.

It flunked those in 2015, 16 and 18 .... Doing so again, regulators reportedly fear, could dent confidence even more.

Deutsche has, it says, invested heavily to meet regulatory demands .... But concerns pivot around its investment bank operations, which account for most of the 9,000 people it employs in the US ... And which saw Q1 overall revenues slide 13 per cent from a year ago.

The news comes just after Donald Trump sued Deutsche and Capital One - in a bid to block them handing over records on his finances to the US Congress.

While at home Deutsche's future as Germany's top lender is under fierce debate ..... After last Thursday's confirmation that six weeks of merger talks with Commerzbank to create a new banking giant had come to an end.

(SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK ROBERT HALVER SAYING: "The investment banking, especially that of the Deutsche Bank, must be watched closely.

In the U.S. or in Great Britain banks are supported by the state, because they know full well a national economy does not function well without great banks.

Berlin should realise that as well." The US Fed is expected to finish examining Deutsche's US operations in the coming weeks - and announce results in July.

Deutsche boss Christian Sewing told analysts last week it was "non-negotiable" the bank remains globally relevant - including in the US.

But Fitch and Moodys have expressed concerns over its performance there - both agencies have Deutsche tagged for a possible downgrade.

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