A European Central Bank inspection of Deutsche Bank's risk controls found deficiencies in derivatives and complicated financial bets that raise questions about pricing processes at the German lender, Il Sole 24 Ore reported.
The review, which started a few months ago and recently ended, found that the bank’s risk management systems were not sufficiently integrated or strong enough to challenge client-facing staff, the Italian newspaper said, citing a person it didn’t identify. Inspectors turned up weaknesses in contracts ranging from life insurance to climate-related securities, Sole said.
As a result of the inspection, the ECB’s supervisory arm has set up a special working group to provide better visibility on the valuation of derivatives, according to the Italian newspaper. A final report on the inspection is still under review at the ECB, Sole said.
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