U.S. Slams Deutsche Bank for Inadequate Oversight

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July 23 (Bloomberg) -- Bloomberg’s Hans Nichols reports on the findings of a New York Federal Reserve Bank review of Deutsche Bank’s U.S. operations and the impact on the firm’s shares in today’s trading in Germany. He speaks on “The Pulse.”

What is happening in germany, but the u.s. operations.

This is really focused on the u.s. operations.

Think of this as a bad report card that you got before christmas and it get -- and it became public in july.

The question everyone is asking is is the underlying behavior still there or hasn't been rectified?

Deutsche bank has done quite a bit to rectify some of its problems.

When mark legal settlements.

They have tried to work closely with regulators.

Yet this letter came out.

It is likely that it came from the new york fed's office.

It is unlikely that deutsche bank would actually release its own letter because you have seen their shares get absolutely hammered.

It happened yesterday when the wall street journal initially reported this.

Shares dropped almost 3%. that was matched this morning at the open in frankfurt.

Here is what the letter said.

It is blistering when you listen to the tone.

"the size and breadth of errors wrongly suggest that the firm's entire u.s. regulatory reporting structures requires wide-ranging, remedial action." whenever i was told that i needed remedial action, i note that meant something needed to be changed.

Lex i do not know what you are talking about.

Never happened to me.

Honest.

The interesting thing here is that what this tells me is the story surrounding the banks, the litigation stories surrounding the banks, is not going away.

The relationship with the regulators is not being fixed.

The story that has really dampened down shares for the last few years is not changing.

Is that the right read here?

You could not make some of this stuff up.

Lex on the litigation, they have made strides to settle some of these.

They do not know how big the hole is going to be if there is a fine on the currency manipulation.

That is the big question on litigation.

In some ways, you have some sympathy for european banks that are in the states because they have so many different regulators to deal with.

In this case, they have run afoul of the new york fed.

The new york fed is displeased with their u.s. operations.

In january, this letter is sent in december.

In january, the bank announces a bunch of changes.

One billion more euros for compliance.

Better computer and training systems.

The question is, was the january announcement enough?

Does the regulator want to see more?

If it wants to see more, does it want to see earnings and numbers and figures restated?

If that is the case, this could be even worse for deutsche bank.

Thank you very much indeed.

Hans nichols will be back a little bit later.

Let's turn our attention now to technology.

Apple posted growth in profits.

Bottom line doing well with the iphone once again the jewel of the crown.

Elsewhere in the tech landscape, investors seem optimistic about microsoft as well.

Hopeful that its new ceo is now making some of the necessary cost cuts to reorganize and reorientated this business.

Let's talk about both companies.

Airline hide joins us to talk

This text has been automatically generated. It may not be 100% accurate.

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