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Deutsche Bank has severed ties with “very few” of its richest customers with a criminal record after the arrest of financier Jeffrey Epstein.
When the largest bank in Germany approved Epstein as a customer in 2013, he was already guilty of sexual misconduct. Deutsche agreed last year to pay $ 150m for failure to comply this includes his actions with the treasurer, who died in prison suicide in 2019.
Deutsche CEO Christian Sewing admitted last year that the idea of doing business with Epstein was a “big mistake”.
Following Epstein’s arrest in 2019, Deutsche investigated internally to look into “some customer cases that have already gone up but need to be treated differently today,” Stefan Simon, chief bank manager, told the Financial Times.
As a result, it ended their relationship with “minority” clients, Simon said, adding that legal issues were different from Epstein’s.
Simon, a former colleague of law firm Flick Gocke Schaumburg and a member of Deutsche, joined a credit union in 2019 as the subject of legislation.
This year he was re-appointed to oversee compliance and financial violations. He took over the reins after being publicly criticized by German financial officials BaFin bad correction and has promised to make them “very helpful”.
Mr Simon acknowledged that his rivals had begun developing their own strategies for dealing with economic hardship earlier than Deutsche. “We’re lagging behind and we’ve been holding on for a while now,” he told FT.
Simon has also begun to change the bank’s policy, prompting the department at Frankfurt’s lending headquarters to reinstate half of its staff.
Deutsche has also made additional funding but it is not known if the changes will follow. The loss of money is part of what the bank would have missed out on its old 2021 price tag, which was released this summer. Over the past two years, Deutsche has spent 2 bn on its development projects and some of its followers.
More money will be spent on Deutsche’s financial strategy, including its expertise in financing counter-terrorism and embezzlement – an area that BaFin and the US Federal Reserve sought to improve.
The bank is also reviewing IT infrastructure and will soon begin to redesign the old-fashioned viewing systems shared by the new program. “It doesn’t make our own way less but we will buy more on the shelf,” says Simon, adding that this will “save us time and money”.
In addition to making extensive use of new software by other stakeholders, Simon emphasized that banking ideas are important in preventing legal compliance and compliance. “First and foremost, a business that operates is advanced and manages financial risks – as in the case of financial or customer related issues or events,” he said.
“If in doubt, we should say no to customers and events, even if they are legitimate. This can be painful in terms of business but we just have to do it – and we are already doing it.”
He also urged Deutsche to punish investors who fail to anticipate this. “We’ve done this before,” said Simon, refusing to discuss further.
FT in June also said that the departure of the two former supervisors is linked to the ongoing investigation he is said to be wrongly selling foreign perfumes for customers selling in Spain. Simon declined to comment on the investigation, dubbed code “Teal”.