Deutsche Bank AG, the German lender seeking to overhaul how it manages risks, made a bet on US inflation that has put the firm on course to lose as much as US$60 million, people familiar with the matter said.
The trade used derivative products tied to US inflation, said the people, who requested anonymity because the details are not public.
The Frankfurt-based lender has been examining whether Deutsche Bank traders breached risk limits on the deal, some of the people said.
The case has been escalated to the bank’s supervisory board, one person said.
Deutsche Bank chief executive officer John Cryan has been trying to improve the lender’s risk and operational controls, which have drawn scorn from regulators around the world.
A risk limit violation could indicate a weakness in the bank’s oversight of its traders in a business that earned about US$270 million in the first quarter.
Just two months ago, the US Federal Reserve fined the firm for failing to ensure that traders abide by the Volcker Rule, a US law that restricts lenders from using their own funds to make speculative trades.
‘SELL’
“If it is true that a single trade could cause such a loss at Deutsche Bank, then this would be a clear setback to Cryan’s efforts to improve controls,” said Michael Seufert, an analyst with NordLB who has a “sell” recommendation on the stock.
“He has vowed to end such control failures,” Seufert said.
An official for Deutsche Bank in New York declined to comment.
Deutsche Bank made the trade in anticipation of how clients were going to transact and is not expecting the bet to reverse, one of the people said.
Inflation traders buy and sell bonds linked to inflation, such as US Treasury Inflation-Protected Securities, and other derivatives, such as options.
Hypermarket chain Carrefour Taiwan and upscale supermarket chain Mia C’bon on Saturday announced the suspension of their partnership with Jkopay Co (街口支付), one of Taiwan’s largest digital payment providers, amid a lawsuit involving its parent company. Carrefour and Mia C’bon said they would notify customers once Jkopay services are reinstated. The two retailers joined an array of other firms in suspending their partnerships with Jkopay. On Friday night, popular beverage chain TP Tea (茶湯會) also suspended its use of the platform, urging customers to opt for alternative payment methods. Another drinks brand, Guiji (龜記), on Friday said that it is up to individual
UNCERTAINTIES: Exports surged 34.1% and private investment grew 7.03% to outpace expectations in the first half, although US tariffs could stall momentum The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its GDP growth forecast to 3.05 percent this year on a robust first-half performance, but warned that US tariff threats and external uncertainty could stall momentum in the second half of the year. “The first half proved exceptionally strong, allowing room for optimism,” CIER president Lien Hsien-ming (連賢明) said. “But the growth momentum may slow moving forward due to US tariffs.” The tariff threat poses definite downside risks, although the scale of the impact remains unclear given the unpredictability of US President Donald Trump’s policies, Lien said. Despite the headwinds, Taiwan is likely
READY TO BUY: Shortly after Nvidia announced the approval, Chinese firms scrambled to order the H20 GPUs, which the company must send to the US government for approval Nvidia Corp chief executive officer Jensen Huang (黃仁勳) late on Monday said the technology giant has won approval from US President Donald Trump’s administration to sell its advanced H20 graphics processing units (GPUs) used to develop artificial intelligence (AI) to China. The news came in a company blog post late on Monday and Huang also spoke about the coup on China’s state-run China Global Television Network in remarks shown on X. “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the post said. “Today, I’m announcing that the US government has approved for us
The National Stabilization Fund (NSF, 國安基金) is to continue supporting local shares, as uncertainties in international politics and the economy could affect Taiwanese industries’ global deployment and corporate profits, as well as affect stock movement and investor confidence, the Ministry of Finance said in a statement yesterday. The NT$500 billion (US$17.1 billion) fund would remain active in the stock market as the US’ tariff measures have not yet been fully finalized, which would drive international capital flows and global supply chain restructuring, the ministry said after the a meeting of the fund’s steering committee. Along with ongoing geopolitical risks and an unfavorable
RSS