Three global banks are in danger of losing their ability to manage pension funds in the U.S., as the Department of Labor wrestles with how to hold financial institutions accountable for criminal misconduct.
Bloomberg News reports that the Labor Department, in mid-July letters reviewed by Bloomberg, told Deutsche Bank, UBS and Royal Bank of Scotland that it had tentatively rejected their requests to keep managing U.S. pension money. The banks, which admitted guilt earlier this year over manipulating foreign exchange or benchmark interest rates, were required to seek the department’s permission to maintain their Qualified Professional Asset Manager status.
Such a rejection would be a departure for the Labor Department, and the tentative decision comes early in a process that allows for additional bank response and public comment.
Public interest groups and lawmakers including U.S. Senator Elizabeth Warren, a Massachusetts Democrat, have pressed the Labor Department for tougher reviews of banks convicted of crimes before clearing them to continue their pension-management businesses.
The department could use a threat of denial as leverage to place stricter conditions on any permission it may ultimately grant.
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