Fed examines Deutsche's role in Danish money laundering: Bloomberg

FRANKFURT (Reuters) – US central bank examines Deutsche Banks ( DBKGn.DE ) role in a money laundering system that has integrated both it and Denmark's Danske Bank ( DANSKE.CO ), reported Bloomberg Wednesday.

Fed's survey is at an early stage, says Bloomberg and quotes independent people who are familiar with the matter.

The US central bank investigates whether Deutsche Bank in New York has properly monitored the transfer of funds it carried out on behalf of Danske from its Estonia branch, the report adds.

The Deutsche shares declined 1.8 percent in the early trade and made Germany's DAX index .GDAXI, which was 0.6 percent.

Deutsche Bank refused to comment. Danish CEO Christian Sewing said last week that the bank was investigating the Danske case internally and that it had no indications of default on the bank's side.

Deutsche Bank has collaborated with the Fed, Bloomberg reported.

Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 to 2015, and a source of direct knowledge of the case has told Reuters Deutsche Bank has helped to process most of the payments.

A director of Deutsche Bank has said that the lender only played a secondary role as a so-called correspondent bank to Danske Bank, which limits what needed to know about the people behind the transactions.

In 2017, the Fed was among regulators who fined Deutsche Bank nearly $ 700 million for weak controls that allowed money laundering from Russia. An American justice department in the case is still ongoing.

In November last year, Germany's largest bank was the subject of another money laundering claim. Police searched all members of Deutsche Bank's board as part of a two-day rhythm and investigation of money laundering allegations in connection with the Panama papers.

Deutsche Bank has also said that there were no indications of neglect in this case.

In September, German regulator BaFin urged Deutsche Bank to do more to prevent money laundering and "terrorist financing" and designated the accounting firm KPMG as a third party to assess progress.

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