Two Global Banking Giants Face the Regulators' Wrath

Last month’s news of two systemically important financial institutions, Deutsche Bank and Credit Suisse, 19th-century titans in banking, being fined by the US Federal Reserve Board and the UK Prudential Regulatory Authority has become a wake-up call to urge a review of corporate governance and risk management strategies

- Jennifer Paldano Goonewardane.

Risk oversights and governance weaknesses have cost millions of dollars in recent weeks of some of the most prestigious financial institutions in the world. Deutsche Bank and Credit Swiss were the crème de la crème of the industry until they soiled their reputations with questionable dealings with clients who manipulated their internal structural weaknesses to deposit large sums of money with dubious origins without reportage to central banks. In a competitive, cutthroat industry, making profits at any cost has become the end-all and be-all of success and shareholder enrichment.

Regulatory authorities, notably in developed countries, have slapped hefty penalties, not once, but on several occasions, for a slew of breaches by internationally prestigious banks. Some of those banks with histories of over 100 years are facing penalties for failures on many fronts, including anti-money laundering failures, inadequate financial reporting, data breaches, risk management inadequacies, onboarding individuals with questionable records with connections to drug trafficking, human rights violations, sex trafficking, and other criminal activities, market manipulation, among many others.