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February 24, 2014

Deutsche Bank to cut US unit’s assets by quarter to meet Fed rules

“Deutsche Bank has for the first time laid out plans to slash its US balance sheet as it seeks to allay concerns over how it would deal with tough new rules imposed by the Federal Reserve on foreign banks.

“The lender aims to reduce assets held in its US arm by up to a quarter largely through reassigning some operations to Europe or in Asia. This comes after the Fed confirmed last week that overseas lenders operating in the US would have to ringfence capital in the country to safeguard against future financial crises.

“Stefan Krause, Deutsche’s chief financial officer, told the Financial Times that the lender was confident it would be able to meet the new capital and leverage requirements imposed on its US arm. He said the balance sheet adjustment should not be seen as a pullback from the bank’s US franchise, where the lender is focused on growing its asset and wealth management business as well as battling to regain ground lost to US rivals in its flagship fixed income arm.

“The US continues to be an important market for us. We are very comfortable we will be able to meet the leverage requirements in the US,” he said.”

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Read full Financial Times article here

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