2 US senators seek probe of Deutsche's compliance history

Washington

WALL Street critic Elizabeth Warren is joining with a fellow Senate Democrat in seeking a Banking Committee investigation of Deutsche Bank's compliance with US safeguards against money laundering.

The Massachusetts lawmaker, widely seen as a potential 2020 presidential contender, signed onto a letter with Senator Chris Van Hollen asking committee chairman Mike Crapo to open a probe of the bank's compliance history, "with a focus on its correspondent banking operations and vulnerabilities to money laundering".

A Senate investigation, which Ms Warren and Mr Van Hollen want to see followed by a report and hearing, could put further pressure on the Frankfurt-based bank, which is also likely to face scrutiny from the House Financial Services Committee next year.

Representative Maxine Waters, the California Democrat set to become chairman of the House panel, is planning to probe matters including the company's ties to President Donald Trump, according to a memo obtained by Bloomberg News.

The letter from Ms Warren and Mr Van Hollen, sent Thursday, cites Deutsche Bank's "numerous enforcement actions" and a recent raid by police officers and tax investigators in Germany.

It also notes the lender's US operations being implicated in cross-border money-laundering accusations such as in a recent case involving Danish lender Danske Bank A/S and the movement of US$230 billion in illicit funds.

"The compliance history of this institution raises serious questions about the national security and criminal risks posed by its US operations," the senators said in their letter. "Its correspondent banking operations in the US serve as a gateway to the US financial system for Deutsche Bank entities around the world." Mr Van Hollen, a Maryland Democrat, questioned the Federal Reserve earlier this year about how it would keep the White House from interfering with oversight of the lender, which had been a major lender to Mr Trump's real estate business.

Ms Warren, who gained prominence as a fierce critic of Wall Street banks after the 2008 financial crisis, also weighed in on banking oversight last month, accusing regulators of failing to respond to dangerous behaviour in the trillion-dollar market for leveraged loans.

In a letter to Treasury Secretary Steven Mnuchin and Fed chairman Jerome Powell, she argued that the market shares some of the characteristics of the subprime mortgage market before the collapse in 2008. BLOOMBERG