ABA pointed out that this bill would have unintended consequences. Duetsche Bank is not the first to take such actions, Barclays Bank recently took a similar action.
Duetsche Bank spokesman Duncan King stated:
We have always had and will continue to have appropriate capital levels in all our US regulated entities. This action – which does not diminish any of our regulatory oversight – allows us to streamline out organizational structure, strengthening an already strong institution.
The restructuring of Deutsch Bank was briefly discussed during the Senate Banking Committee hearing on the international impacts of the Dodd-Frank Act today. The Committee posed questions about foreign bank’s business within the US and the extend of US regulators’ authority over such institutions.
Federal Reserve Governor Daniel Tarullo admitted Deutsch Bank’s actions have affected his thinking about foreign banks and mentioned the possibility of rewriting or restructuring the proposed rules affecting such institutions.
When questioned to name other countries with regulations similar to the Dodd-Frank Act, Tarullo was unable to produce a name. The Committee members questioned whether the Dodd-Frank Act may continue to scare businesses out of the US.
Watch the hearing.