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NY Fed Slams Deutsche Bank (And Its €55 Trillion In Derivatives): Accuses It Of "Significant Operational Risk"
First it was French BNP that was punished with a $9 billion legal fee after France refused to cancel the Mistral warship shipment to Russia (which promptly led to French National Bank head Christian Noyer to warn that the days of the USD as a reserve currency are numbered), and now moments ago, none other than the 150x-levered NY Fed tapped Angela Merkel on the shoulder with a polite reminder to vote "Yes" on the next, "Level-3" round of Russia sanctions when it revealed, via the WSJ, that "Deutsche Bank's giant U.S. operations suffer from a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight and weak technology systems."
What could possibly go wrong? Well... this. Recall that as we have shown for two years in a row, Deutsche has a total derivative exposure that amounts to €55 trillion or just about $75 trillion. That's a trillion with a T, and is about 100 times greater than the €522 billion in deposits the bank has. It is also 5x greater than the GDP of Europe and more or less the same as the GDP of... the world.
In a letter to Deutsche Bank executives last December, a senior official with the New York Fed wrote that financial reports produced by some of the bank's U.S. arms "are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm's entire U.S. regulatory reporting structure requires wide-ranging remedial action."
The criticism from the New York Fed represents a sharp rebuke to one of the world's biggest banks, and it comes at a time when federal regulators say they are increasingly focused on the health of overseas lenders with substantial U.S. operations.
The Dec. 11 letter, excerpts of which were reviewed by the Journal, said Deutsche Bank had made "no progress" at fixing previously identified problems. It said examiners found "material errors and poor data integrity" in its U.S. entities' public filings, which are used by regulators, economists and investors to evaluate its operations.
The shortcomings amount to a "systemic breakdown" and "expose the firm to significant operational risk and misstated regulatory reports," said the letter from Daniel Muccia, a New York Fed senior vice president responsible for supervising Deutsche Bank.
...
Deutsche Bank's external auditor, KPMG LLP, also identified "deficiencies" in the way the bank's U.S. entities were reporting financial data in 2013, according to a Deutsche Bank email reviewed by the Journal.
Oh wait, so those €55 trillion in derivatives are actually completely fabricated? Well if that doesn't send the S&P 500 limit up nothing will.
DB's response is the generic one already attempted by that other permacriminal bank, Barclays, which hired a few hundred compliance people after it was revealed that the British firm was manipulating and rigging pretty much every product and market it was involved in.
"We have been working diligently to further strengthen our systems and controls and are committed to being best in class," a Deutsche Bank spokesman said Tuesday. As part of this, he said, the bank is spending €1 billion globally and appointing 1,300 people, including about 500 compliance, risk and technology employees in the U.S. Mr. Muccia declined to comment.
Sadly for now what this latest Pandora's box means is that confidence in Europe's insolvent banks just crashed with a bang once again, not that it would be reflected in the stock's rigged price of course: rigged most likely by Deutsche Bank among other of course.
The New York Fed's concerns also pose a challenge for Deutsche Bank's longtime finance chief, Stefan Krause, who is ultimately responsible for the company's financial figures and has been spearheading efforts to improve the quality of the bank's reporting.
The concerns from regulators strike at the heart of an issue plaguing many of the world's big banks: Some investors lack confidence in the integrity of their numbers. Such fears have been especially prevalent in Europe.
Then again, none of DB's numbers actually matter: if the banks needs a bailout the Fed will promptly step in, and today's advisory has one simple end point, which happens to be the same as the recent BNP $9 billion fine - don't even dare to side with Putin over the US. Because you sure have big bank over there Germany... It would be a pity if the NY Fed i) revealed just how insolvent it truly was and ii) decided not to bail it out subsequently.
* * *
As for Deutsche Bank's response perhaps the simplest and most effective one would be for the Frankfurt megabank to tell the NY Fed that perhaps its own 150x leverage is just a little more worthy of attention.
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in other words - Germany is turning East and joining Russia and China's BRICS
US seem to really want to piss off their long term allies, after throwing the US spy out of Germany, it may be an interesting response from Merkel
NSAUSSA take your bases and Spyware and get the fuck off my CLOUD.
O'bamas N'SAUSSA has a nice ring to it.
Sort of like the way your ears ring when something explodes.
Deleted it because I was so wrong.
Just saw a book entitled "End The Fed" at the local thrift store.
Some guy named Ron Paul wrote it.
One day people will remember that name.
Long after the SHTF
...an issue plaguing many of the world's big banks: Some investors lack confidence in the integrity of their numbers.
Notice how they paint it? The numbers are crap, but the problem is a lack of confidence only according to them.
Reality is what you make of it.....
Numbers are crap.....confidence issue
Accounting is harsh....Change Accounting
Ratios are harsh....Print money as gifts
But the bonuses must flow....
What ever happened to German regulator BaFin's investigation of Deutsche Bank for gold market manipulation?
I guess the World Cup got in the way. But now that the summer holidays are here, it's off to the Greek beaches for the Bonn and Frankfurt chair warmers.
So it's "Tschussi "from BaFin, with a 'Back in September' sign on the door.
any news on the german
now jewish gold.
was the gold more german compensation for the hollow cause
Bundesbank:
"Unsere Gold-Rückführungsplan ist im Zeitplan. Unsere berühmtesten Fußball-Team hat wieder die Weltmeisterschaft Gebracht. Dies ist aus Gold, nicht wahr? Was will man mehr?"
"Our gold repatriation plan is on schedule. Our most illustrious football team has brought back the World Cup. This is made from gold, is it not? What more do you want?"
"' ... hollow cause. "'
Does this stuff come naturally or do you have to work at it?
Yellen to us taxpayer:
http://www.youtube.com/watch?v=z05StkAKKF0
If DB fails everything will fail. Being of German desent, my instinct is to take responsibility for the problem, let the cards fall where they may and move on. I do believe it is a threat based action concerning Russia but Russia is too smart to fall for all these tricks and is just waiting and watching for the US and EU to fail on their own financially, politically and militarily.
Deutsche Bank will NEVER fail, because I heard one guy on TV saying that he will do ANYTHING to save the Euro. There you have it.
If DB goes down the tube, they could always ask the new BRICS development Bank to help them out...oh wait a minute...here we go again!
Fail, baby fail!
ANARCHY FOR THE UK USA WORLD!
Risk and a regulated entity in one sentence?
This is another perfect example of how stupid the ruling elite think the general public really is. This direct threat is so transparent it's laughable.
-Sanction Russia or else Deutsche Bank and the Germany economy gets it.
-We saw you, Merkel, glad handing the BRICS leaders in the luxury box at the World Cup. If you so much as think about entertaining the idea of expanded BRICS cooperation let alone joining the BRICS new currency basket and IMF alternative, Deutsche Bank will be the cement shoes that seal the fate of your administration.
Capiche?
soc gen results
http://markets.ft.com/research/Markets/Tearsheets/Financials?s=GLE:PAR
i still think it will be the french that trigger before the germans
2 words:
Moral Hazard.
Another 2.
Rabid contagion.
Bonus set.
Eternal Unwind.
Systemic Corruption.
Don't mess with the Tylers bitchez....they called it:
http://www.zerohedge.com/news/2014-07-08/us-set-alienate-angry-germany-next-crackdown-shifts-bnp-commerzbank-deutsche-bank
Z Germans are starting to feel how true friendship feels like... with a friend like America you better start collecting phone numbers of your enemies -> you will need their help.
"a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight and weak technology systems."
Were they talking about Bubba, the Fed or Wall Street in general? So hard to tell the players apart these days!
More death throes of a dying nation and it's dwindling influence brought upon by it's own hypocrisy and one which jails none of it's banking criminals and matter of fact permits them to purchase the government from the top down.
You know what they call a leader with no followers?? Just a motherfucker going for a walk..
Remember that American Government (Cartel).
That's the pot calling the kettle "vantablack".
http://www.smh.com.au/technology/sci-tech/scientists-create-an-invisible...
Steal their gold.
Monitor their communications.
Threaten their largest bank.
Perhaps it is time to consider the various ways to add an F and a G to BRICS.
At this rate the Obummer regime will successfully alienate the entire EU by mid-winter.
Just add Italy and Nigeria to the list and you have F-ING BRICS!
You could add Uruguay, Chile and Kenya to F-ING! :)
I'm sure there are enough countries that could spell 1-800-Fuck YO. Oh wait, that one is already taken for Zerocare.
Aren't they just looking for scapegoats when this MF goes belly up?
Maybe it's just a domestic election issue?
There are lots of 'vowel' nations on the planet...don't think a new acronym will be a problem...gimme an A.. Albania, Austria, Australia....gimme a B Belgium, Bulgaria, Bolivia...see...alliances are easy if you play nice...
Rammstein said it best: "NEIN!"
Reducing the 'american' french bank story to the delivery of the ships to Russia is another easy way to divert from reality.
'Americans' do not care about the delivery of ships as the Russians are unable to put them to use. The russian thirst for weaponry is like gun ownership: it serves people who can use weapons/guns for what they are designed. Hoarding guns helps only those who do use the guns on a daily basis to expand and service their way of doing business.
The days of the USD as a reserve currency are numbered and every passing day brings closer to the demise of the USD as a reserve currency. Hollow words that fit the 'american' mindset. Platitudes that can be stated of anything that has a start and an end. The USD fits the bill.
The reality though is that the status of the USD as a reserve currency is stronger than ever. That is why 'americans' residing in the US can use it as a way to shear people all around the world, including 'americans' residing in other places like European countries.
People want the privilege of using the USD? They must pay for it. The situation is funny, because the USD enjoys a monopolistic situation and it is used to do what a monopoly is best at: squeezing people.
Yet, instead of appreciating the events as they are and see what they reveal, 'americans' prefer the fairy tale that the days of the USD as a reserve currency are numbered.
The USD as a reserve currency has never been stronger as it reveals by the use 'americans' in the US make of it.
Though there is some truth mixed into your Moo Goo Guy Pan, there was still plenty of horseshit, melamine and cadmium too, which is par for 'chineseism'.
It reads more like....
Haters gonna hate
It ain't like we are proud of it. But your screed sounds like you're pissy because your flavor of cleptocrats hadn't perfected the scam first.
The would if they could..and as always, 'chinese' are playing catch up.
Haters gonna hate.
How is it that US regulators can always spot this in foreign banks but cannot see it domestically?
To ask the question is to answer it.
So where is Reggie Middleton when we need him to explain the banking situation ? I guess he is playing with his Bit Coins
I'd rather have Boris ring in on this...
Boris, calling Boris.
Pick up the courtesy phone please.
It seems disingenuous at best to refuse return of German Gold and then slam the Germans for their irresponsibility.
They don't like people who complain anout the NSA...
There is no such thing as money; it's all in your stupid heads!
The only thing that matters are things .... real things.
Which one of you pipe hitin’ bitchez gonna downvote this post?
How would the Euro survive without Germany?
How would Germany survive without Deutch Bank?
How would the US Fed or IMF survive a collapse of the Euro banking system?
Really, who the hell is threatening who here?
The 'american' middle class have overpopulated the world.
The 'american' solution: for the 'american' middle class to survive, part of the 'american' middle class must be sacrificed so that the rest can breathe and live an 'american' middle class life.
The 'american' middle class is not to be found in countries like Zimbabwe or Vietnam, those countries contain the weak and poor types 'americans' build their success on.
The 'american' middle class is to be found in 'american' countries. The collapse of an 'american' middle class in a country in Europe means more room for the rest of the 'american' middle class in the world.
The 'american' middle class have overpopulated the world
Yep.....can't have people living good lives now can we. What we need are more people in hovels taking shits on the side of the road so more of the oligarchy can have all they desire as we are lessened to the level of gutter rat like you and yours. We will be right there next to you in the trenches.
Actually, cow shit huts are all the rage.
ess a /s.
Let me guess.. Socialism is the answer? If challenge you to point to one historical example where centralized control, collectivism and capital controls resulted in a prosperous, free, unencumbered society. I'll wait...
name one example of a pure capitalist system. I'll wait...
Jesus buzz, stop holding your breath, you don't look so good...
The United States under the Articles of Confederation, 1781-1791, and for short periods thereafter punctuated by periodic rent-seeking agreements by various industries and association that were usually short-lived.
The problem is that it is in the nature of human beings to venerate authority figures, like surrogate parents to adult people.
It is also in the nature of humans to seek unearned wealth.
The combination is deadly.
Don't shoot or the nigga gets it.
Well how the hell else did they expect them to conquer Europe?
You want a new world order you better be prepared to pay the Germans.
NWO needs a global crash to become the saviour of the world, so all this is scripted one way or another.
But it's all right now, in fact, it's a gas. . .i'm jumpin' Jack Lew it's a gas gas ass. . .GET STONED
Check page 29 on this pdf file report by the Office of Comptroller of the Currency. JPM exposure to derivatives was $71.8 trillion as of September 30th, 2013, Citibank's exposure was $62.9 trillion and Goldman Sachs' exposure was $47.6 trillion. Will the Fed slam these three banks too? Top 3 US banks exposure to derivatives is $182.3 trillion while US GDP is $16.7 trillion so that is 10.9 times US GDP. Granted that DB's leverage to German GDP is 20 times but relative to Eurozone GDP it's 5.69.
http://www.occ.gov/topics/capital-markets/financial-markets/trading/deri...
Once this NWO boondoggle starts requiring skin in the game and the loonatics that conspired to bring it about start believing what the opposition is saying the whole freakin thing will turn against them. Everyone will be against the perpetrators. They will be sitting ducks for the entire world to take down.
Idiots.
Let me see...the NY FED vs Germany...just like WWII all over again, except backwards
Well if you knew you were not going to get your yellow property back - what would you do? spend away using the currency they trade the yellow in, knowing it'll blow up?
Russia doesn't trade that much with the U.S. so it's no big deal really for U.S. sanctions.Europe can't afford the cost right now,it'll put them further into recession.Not that Obama,Cameron and little puppet Harper care.Russia's got other directions to go.They know that Europe is flat broke and the Ukrainian winter this year will be a complete unemployment disaster.When Russia is pushed into the corner,watch out because Europe's going bust and Russia knows it.Europe needs the land link by rail across Russia in order to make it more efficient and China who is Europe's biggest trading partner is siding with Russia.If you want investment today,you keep the Chinese happy not the Americans.
Angela, you need to face the fact that DeutscheBank is toast like the rest of them and the end can only be postponed. Caving to the Fed on Russia only buys six months or a year, so in weighing the cost, ask what is six months is worth. Maybe it's time to quietly call their bluff and make clear you're ready to pull the rug out and let the world system crash and step in to nationalize DB after it implodes, pick up the pieces, start issuing DeutscheMarks directly and trading with the world using DM's, Franks, Roubles, Yuan, Yen - and Iranian Rial.
They'll either back down or try to remove you. Are you ready for them? Will six more months to get ready be worth the cost?
You're a physicist. So you know that trying to follw the details of a chaotic state transition can be a waste of time, and what you need most to be clear about is the initial and final state, as best you can discern them. You're a statesman and politician, and you know how the experience of political forces can override your understanding and leave you doing things such that you don't even recognize yourself in.
This is a moment to really get a grip and do the hard thing, the resolve buried in your heart, to go against everything expected and customary, comfortable and easy, and call your people to battle, a moment where an effort that might in another time be useless could be enough to pull clear of the rocks and unlock the transition.
DB, or Germany. Time to choose.
when the music stops, guess who gets chairs?
hint: it ain't the average schmuck.
The stock market doesn't care.
If a nuclear bomb was dropped on a major US city, the market would be green the next day.
As long as it wasn't NY...
Market? What market?
My very good friend, Budgie Twitters, told me yesterday that I have to stop reading the blogs that run around like Chicken Little with their constant warnings about Risk.
He says that in order to get a grasp on how things actually are in the real world one has to step back as it were, from the telescope, and look without any visual aids at the Cosmos, at night.
From our vantage point, in some cases trillions of miles into deep space, we can see an uncommonly gorgeous order that confounds all but the most organized sock drawer of the biggest OCD patient on earth.
Howsomever, Budgie says, that in reality that 'order' we see is actually a trillion billions of explosions that occurred for sure, in many cases quite long b 4 he was born in 2006.
And yet...and yet....who can deny that 99.9% of that vision in the night sky appears fixed in place like the image on a photograph. The Twins, Gemini, Scorpio never ever change, boringly moving across the heavens on the same trajectory for over a year now, you can set your watch by their travels.
So I have stopped listening to the Risk On disasters that are predicted and write it off to those Bloggers who need to believe in something dramatically pessimistic in order to get out of bed in the morning.
J B T Fing D. S T Fing S.
Somebody didn't pay off someone...
http://www.thedailysheeple.com/proof-that-the-u-s-financial-system-is-a-criminal-enterprise-operation_072014
Is this world for real ????????
Is this world for real ????????
No.
No
But, but, without a debt driven society. How will our Central Bankers, G20, NGO'S, and puppet installed political minions make money from the peasants?
they will create a market for derivatives
on a new exchange in a galaxy, far, far away;
then they will jack up the price you must pay.
Double post. Time to move to another IP device. Battery shot.
Don't worry sheep. Only non US banks have large derivatives exposure.
Can you provide a chart to substantiate your claims?
Who needs data? It's just that warm fuzzy feeling I get when I think about US banks. Besides, the MSM says , "don't worry".
Fair enough, miss read your post. My apologies.
Seriously! Are you fucking kidding me?
"In a letter to Deutsche Bank executives last December, a senior official with the New York Fed wrote that financial reports produced by some of the bank's U.S. arms "are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm's entire U.S. regulatory reporting structure requires wide-ranging remedial action."
Those "U.S. banking arms" were just fine when Greek, Spanish, Portuguese, Italian, French > bonds were exploding in YIELD you bullshitting " pied piper" of Maiden Lane !
Roll the Guillotines Bitchez
Time for another round of banking stress test.
/lol. Below 10% battery. Have to run.
Hey Atomizer... Expect "reverse repos" to triple long before month or quarter end. ;-)
Shhhh. don't yell fire. Winks.
The Reverse Repo amount for Q3 is going to rival if not dwarf the $700B TARP that scared the bejesus outta Everyone only 7 years ago...
....& most People will have no fucking clue that it is even happening...
It will be when supply chains fail, nothing less.
Based on what I am reading here and elsewhere, it sounds like derivatives are coming unwound and the banksters are playing a game of Hot-Potato before the timer goes off--None of them want to be holding the shit-grenade when it goes off.
+1 for "shit-grenade".
New technology. Who needs a fan anymore?
Derivatives failure will be the lube that ends up turning this whole shitshow into a HFT girl on girl fist fuck to the death.
Bidless, motherfuckers. It's going bidless.
UrbanDic - Bidless = no buyers
" Deutsche has a total derivative exposure that amounts to €55 trillion or just about $75 trillion and...is about 100 times greater than the €522 billion in deposits the bank has"
What can possibly go wrong?
F R A U D ..... garganttuan fraud.... ok face the corner for the rest of today and write 1000 times before you go home.... I am a bad bank... ok dismissed
That is VERY FUCKING FUNNY. Nice word play.
Edit: "Who da bad bank, who da bad bank?"
This tiff with Angie could be one hell of a show to give our ally a much needed injection and to pay off some gold debt. (I know, my tin hat is too tight).
I am not a computer geek, can you use something like Torrent, to print?
AIG AIG somebody get AIG
Guillotines are too quick.
We need a Hunger Games for bankers.
Put them on an island, attach GoPro's on their heads and make them kill each other.
Fuck that.
I want me some.
Agreed if financial information from a top tier bank isn't so reliable than where does it leave us? However slightly irrelevant and misleading to comment on the gross notional exposure of DB, I'd imagine the net MTM is only a few % of that. Also the comment of KPMG identifying "deficiencies" in the way the bank's U.S. entities were reporting financial data in 2013 does not not at all imply that the "€55 trillion in derivatives are actually completely fabricated". No need really to obfuscate an important point with misleading info; the report from the Fed was enough by itself.
Poor DB! To be accused of lax accounting by the NY Fed which not too long ago was headed by none other than Turbo Timmy who couldn't even fill out his tax returns correctly must be very hurtful indeed.
Many times lax accounting indicates underlying losses which the company is trying not to recognize. With 150:1 leverage, what could go wrong?
How is there risk when the profits are private and the losses are public? I mean isn't this a fascist oligarchy or not?
Banksters are honest now...Dodd-Frank and all. Well, OK, that is a lie. Nationstar Mortage,LLC? Fuck you too!
This reminds me of who smelt it, dealt it
WHERE IS JON CORZINE?
Got to wonder who is holding the derivatives and how many times they have been re-hypothecated?
Hello Yellen & your Masters
Please let the world audit you before you open your mouth again.
Or just wind up and disappear
A fall out between thieves does not concern us. You have been part of all that is wrong
i.e. suicide yourselves with a nail gun
http://www.bloomberg.com/news/2011-02-09/nyse-deutsche-boerse-are-said-to-be-in-advanced-talks-to-merge-exchanges.html
NYX purchased in 2011, what did they expect when this hà^^end? That they would be socialy responsible running things?
Attacking non US banks in this way is like playing with matches in shed of dynamite....what could possibly go wrong.
Coming from the organization that took the dollar off the gold standard, thus creating the world's biggest ever con-game, this criticism of DB is absurdly comical.
'tell the NY Fed that perhaps its own 150x leverage is just a little more worthy of attention.'
Don't be silly, they can just print their way out if anything goes wrong, nothing to see here.
At least the FED will magically meet 2% GDP growth by printing its own monetary petrodollar debt. Someone order me a free GM Chevy Volt so it can detonate in my garage. I then can be fined on a carbon tax emission law. Starting a fire exceeds all CO2 mandates.
/sarc
Looks like someones jealous! Or should I say restless and panicked about the prospect of losing the EU to a BRIC!!!
"That's not real money though. Those are just digits on a computer screen..."
Sincerely,
Barney Frank
think of it - 75 trillion!. if just 10% has to be eaten in the end, that's 7.5 trllion. what madness.!
Gernany needs to demand it's gold back right now from William Dudley and the NY Fed.
The EU should join the BRICS. That would really mess up Barry and the NY Fed. Show that middle finger to Barry and the Federal Reserve.
hey man - it's only notional....
The issue is that DB today has no talents viz GS, JPM & MS to handle the explosives. DB is a haven for the CEO and his cronies to take higher risks to justify their compensations. In trading and capital markets, it has no superior products and its much vaunted footprint in Asia is just another show in town. Somewhat like the AIG unit in London pre-crisis, it is giving free lunches to its competitors.
What is good with DB is that it will have the bailout safety net from German taxpayers ? It should be the German Regulators that should be worried and not the FED.
The issue is that DB today has no talents viz GS, JPM & MS to handle the explosives. DB is a haven for the CEO and his cronies to take higher risks to justify their compensations. In trading and capital markets, it has no superior products and its much vaunted footprint in Asia is just another show in town. Somewhat like the AIG unit in London pre-crisis, it is giving free lunches to its competitors.
What is good with DB is that it will have the bailout safety net from German taxpayers ? It should be the German Regulators that should be worried and not the FED.
55 Trillion in derivitives, O MY GOD!, Yellens falling behind, better turn on the turbo on the printing press.
This is a truly AWESOME display of American power.
Not saying I agree with it...but the USA is leaving nothing on the table here.
This is a Minsky moment. Reminds me when the first crack appeared in the sub prime dam. It was summer 07 and one big bank sued another other over some second derivitive sub prime fund. It was the first time the SHTF publicly.
This might be the string that unravels the fabric that holds the house of cards together.
The neocons who run the O are proven economic idiots. Price controls on gasoline in occupied Iraq proved that.
They Arrogance and stupidity is a bad combination.
the world is assuming the possition.
29x leveraged. What will happen IF rates ever go up by a teeny weeny bit.....oh wait. rates can only go into deep negative from now on.
LOL DAX up 100 points overnight, Deutsche down small Espirito UP this market don't give a shit, buy everything.
QE I
QE II
QE III
QED
QE IV
QEF
Douchebank- the same Douchebank that was Argent/Ameriquest Mortgage's primary warehouse lender?
http://www.google.com/?gws_rd=ssl#q=argent+securities+deutsche+bank
"vee haven't changed der mortgage industry, vee have REVOLUTIONIZED it!"
Uhuh. Nothing to see there, mooooove along into the NyLon cattle cars little dogies.