The banking regulatory environment in which Deutsche Bank operates EU banking regulations
The EU banking regulations governing banks operating in EU countries states that
Libor fixing scandal
One of the major banking scandals to rock the financial world in current times is the Libor fixing scandal, this is currently affecting Deutsche Banks and other banks across the world, where it was establish that banks had been rigging the Libor rate which is used to set financial transactions worldwide in order to gain profits. The Basel committee, which consists of financial specialists from the world’s biggest economies, has been working to harvest banking regulations to inspire better practices, decrease banking risks and to avoid any future scandals. In the EU, recommendations from Basel III have been making waves as member states have been arguing about whether or not bankers’ bonuses should have a cap imposed on them. Basel III was drawn up to recommend practices to stop a future financial crisis from happening. The implementation of Basel 111 is also a major regulation that will be affecting Deutsche bank and other banks once implemented. The reform raises three key risks for banking sector, one which is “changes in the way banks do business”, “strains on technology and information” and finally “the increased costs and capital requirements. In Europe, the Capital Requirements Directive (CRD IV) is now close to final agreement, with execution almost certain from January 2014. “CRD IV implements Basel III (i.e., the definition of capital, new capital conservation and countercyclical buffers, the leverage ratio, counterparty risk and liquidity requirements) and the buffers for global systemically important banks (G-SIFI), but it goes much past this”. To achieve “full harmonization” diagonally the EU countries, CRD IV rewrites the entire prudential structure for banks integrating Basel II (credit risk rules) and Basel 2.5 (new trading book...
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