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Deutsche Bank Chided for Lapses

October 16, 2005|From Associated Press

WASHINGTON — The Federal Reserve and state regulators have ordered the U.S. banking operation of Deutsche Bank, Germany's largest bank, to take steps to prevent money-laundering after finding deficiencies in its controls.

The Fed and the New York State Banking Department on Friday announced an agreement with New York-based Deutsche Bank Trust Co. Americas, which was not fined under the deal.

Under the agreement dated Wednesday, the bank promised to tighten its policies and procedures and its reporting of suspicious transactions and customer vetting to prevent money-laundering.

Much of the problem was found to involve its correspondent banking services.

Correspondent banking is a lucrative activity in which banks provide each other with services such as moving funds or exchanging currency. Investigators have found that some large banks that engage in correspondent banking have become conduits for illicit foreign money and have unwittingly aided fraud.

Deutsche Bank spokesman Ted Meyer confirmed the bank's commitment to tighten controls. "There have been no findings of money-laundering, and the bank remains committed to a rigorous anti-money-laundering compliance program," he said.

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