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Morning Coffee: Deutsche Bank's $630m fine down to creaking over-worked team? The easiest front office banking job

By the end of this year, Deutsche Bank will have 1,160 people working in its anti-financial crime unit, and not before time.

Not only has Deutsche Bank been slapped with another fine – this time a collective $629m by UK and US regulators to settle alleged mirror trades used to launder $10bn out of Russia. In the face of the $7.2bn Department of Justice fine over mis-selling mortgage-backed securities, this is small beer (and was reduced by 30% by the UK regulator anyway).

However, statements from both New York’s Department of Financial Services (DFS) and the UK’s Financial Conduct Authority suggest that Deutsche employees suspected illicit activity, but its creaking compliance department was unable to deal with the problem.

The DFS, for example, said that a Deutsche employee was contacted by a European bank concerned about a counterparty. They never responded, nor did they take any steps to investigate: “Later explaining this omission on the ground that the employee had ‘too many jobs’ and ‘had to deal with many things and had to prioritise’”.

As Matt Levine on Bloomberg points out, the FCA Deutsche’s Moscow unit was “strongly convinced that they are a part of one [money laundering] scheme as there is no economic sense behind these transaction [sic] and the whole flow is organized to facilitate cross-border transfers and in order for them to look legitimate”

It did investigate, said the FCA, but Deutsche’s anti-money laundering team wasn’t provided with all the trading data because its operations division said that “providing a spread-sheet will not be possible as this is done manually by a team member and capturing so many records will be painful”, the AML team did not persist with its enquiries.”

Deutsche, lest we forget, is still cutting jobs. While it’s beefed up its compliance team, Peter Hazlewood, the head of its financial crime fighting unit, left in January after just six months in the job because Deutsche wouldn’t hire enough people.

Separately, as we’ve pointed out previously, if you want an advisory role in investment banking and don’t want your life sucked away, go into debt capital markets.

A junior starting out in DCM at a boutique in London has explained on the Wall Street Oasis that he ‘only’ works 55-60 hours a week. No big deal, right?

“What I have been surprised (positively) to find is that those stories of working until 3am, on a Saturday just haven't been true in the slightest. Now don't get me wrong, I do work hard and it is a very intense and competitive environment but even when we're closing deals, I'm rarely in the office past 7.30,” he says.

As Rashid Zuberi, global head of the financing and solutions group (FSG) at Deutsche Bank, told us previously: “Our graduates tend to come in at 8.30am and it’s a long day if they’re here past 7pm.”


Citigroup has shaken up its TMT and FIG investment banking teams (Financial Times)

Brevan Howard’s flagship fund lost $4.4bn in 2016, and has lost half its value over the past two years (WSJ)

Tom Hayes is disputing his Libor conviction on the basis of his Asperger’s syndrome (Financial News)

Emotional intelligence is no longer an advantage – machine outbluffs top poker players (Financial Times)

“In my late 20s, I made a commitment that if I had enough money to live at a basic level, I would retire and give my time to God.” (Financial News)

Banks Brexit plans are so complex, they could take up to four years (Reuters)

A bank by bank guide to Brexit relocations (Bloomberg)

Brexit is a “once in a lifetime opportunity” for the City (Telegraph)

2,000 of Google’s employees have walked out in protest at Trump’s immigration ban (Quartz)

HFTs are suffering from a lack of volatility (Financial Times)

Ray Dalio thinks Trump’s populist policies could spoil the pro-business party (Bloomberg)


Photo: Getty Images

AUTHORPaul Clarke

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