Fed DownGrades Deutche Bank

According to the Wall Street Journal, the Fed designated Deutsche Bank AG's U.S. business as a "troubled condition". "The Fed’s downgrade, which took place about a year ago, is secret and hadn’t previously been made public. The “troubled condition” status—one of the lowest designations employed by the Fed—has influenced the bank’s moves to reduce risk-taking in areas including trading and lending to customers." Moreover, it also caused Deutsche Bank Trust Company Americas to get on the list of FDIC's "Problem Banks", which shows a increased risk of the institution and concern from the Federal Deposit Insurance Corporation.

Both downgrades from the Fed and FDIC's warning increased the panic of the investors; its stock price dropped from 11.58 USD to $10.64 on May 31 2018. Its stock went down more than 40 percent this year.

Deutsche Bank's spokeswoman responded that “We have previously indicated that our regulators have identified various areas for improvement relating to our control environment and infrastructure. We are highly focused on addressing identified weaknesses in our U.S. operations.” citing sources from WSJ.

In the 2015 and 2016, Deutsche Bank failed Fed's street tests, in addition to that they also criticized by the Fed multiple times due to their currency trading and money laundering issues.

Financial Times mentioned that Standard&Poor also downgraded its core subsidiaries from to from A- to BBB+. In addition, Deutsche Bank announced that in order to improve their profitability and cut costs, Deutsche Bank planned to reduce more than thousands of jobs.

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