A single derivatives trade could end up costing the group $60m, casting doubt on the bank's risk control measures.
Deutsche Bank’s risk controls may be in need of further tinkering following a poorly timed trade that could leave the bank losing upwards of $60 million. Compounding these losses is the specter of a risk limit violation, which already drew a fine from the US Federal Reserve this year.
The beleaguered lender finds itself in a troubled situation after a derivatives trade linked to US inflation threatens to spiral out of control and rack up nearly $60 million in losses, according to a Bloomberg report. Of more immediate concern is the facilitation of such a trade without any of the requisite risk control measures advocated by CEO John Cryan, who has been passionate about shoring up this area at Deutsche Bank.
Asleep at the wheel?
Indeed, this is not the first time Deutsche Bank has breached risk limits on its trades, with this most recent episode already making its way to the lender’s supervisory board. The potential loss of $60 million in a single trade is a major blow to Deutsche Bank’s business, that had been struggling to best recent street estimates and maintain its 2017 momentum. Traders at the lender had initially made the transaction in anticipation of how clients were going to trade.
Deutsche Bank’s trading business earned $270 million in Q1 2017 – the prospect of such a catastrophic trade erasing 22 percent of an entire quarter’s profits would constitute a tremendous vulnerability for the bank’s risk controls. Mr. Cryan had been attempting to shore up this area for the past year, especially after an earlier fine in April by US authorities after Deutsche Bank traders failed to abide by the Volcker Rule.
Unfortunately for Deutsche Bank, this latest instance of lapses in its risk controls comes at a poor time for the group as it looks to turn the page on a past rife with fines, trading misconduct, and lax controls. That the trade focused on derivatives is also a sensitive area for Deutsche Bank, amidst recent concerns voiced by the European Central Bank as to how the group manages and values this segment.
Deutsche Bank’s risk controls may be in need of further tinkering following a poorly timed trade that could leave the bank losing upwards of $60 million. Compounding these losses is the specter of a risk limit violation, which already drew a fine from the US Federal Reserve this year.
The beleaguered lender finds itself in a troubled situation after a derivatives trade linked to US inflation threatens to spiral out of control and rack up nearly $60 million in losses, according to a Bloomberg report. Of more immediate concern is the facilitation of such a trade without any of the requisite risk control measures advocated by CEO John Cryan, who has been passionate about shoring up this area at Deutsche Bank.
Asleep at the wheel?
Indeed, this is not the first time Deutsche Bank has breached risk limits on its trades, with this most recent episode already making its way to the lender’s supervisory board. The potential loss of $60 million in a single trade is a major blow to Deutsche Bank’s business, that had been struggling to best recent street estimates and maintain its 2017 momentum. Traders at the lender had initially made the transaction in anticipation of how clients were going to trade.
Deutsche Bank’s trading business earned $270 million in Q1 2017 – the prospect of such a catastrophic trade erasing 22 percent of an entire quarter’s profits would constitute a tremendous vulnerability for the bank’s risk controls. Mr. Cryan had been attempting to shore up this area for the past year, especially after an earlier fine in April by US authorities after Deutsche Bank traders failed to abide by the Volcker Rule.
Unfortunately for Deutsche Bank, this latest instance of lapses in its risk controls comes at a poor time for the group as it looks to turn the page on a past rife with fines, trading misconduct, and lax controls. That the trade focused on derivatives is also a sensitive area for Deutsche Bank, amidst recent concerns voiced by the European Central Bank as to how the group manages and values this segment.
Noel Quinn's Surprise Exit Marks End of an Era at HSBC
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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