According to people familiar with the matter, the US Federal Reserve is to examine how Deutsche Bank AG handled billions of dollars in suspicious transactions from Denmark's leading lender, Bloomberg reported on Wednesday.
The Fed's probe is in an early stage as it scrutinises whether Deutsche Bank's US operations adequately monitored funds from the Estonian branch of Danske Bank A/S, according to two people briefed on the situation, who asked not to be named as the inquiry is not public.
The US requires banks operating under its jurisdiction to scrutinise clients and their dealings to detect potential money laundering and alert the authorities to suspicious transactions. The Fed is among regulators ensuring that banks have adequate systems in place to fulfil these duties.
Danske, which used correspondent banks including Deutsche Bank to move money abroad, has admitted that much of the more than €200 billion that flowed through its tiny Estonian branch between 2007-2014 may have been of suspicious origin; Danske's share in suspicious transactions may be as high as 80%.
Danske relied on the global presence of Deutsche Bank, Bank of America Corp. and JPMorgan Chase & Co. to handle conversions of foreign currencies to US dollars (USD) on behalf of its clients from 2007 to as recently as 2015, people familiar with the arrangement have told Bloomberg.
Editor: Aili Vahtla