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Fed Reportedly To Investigate Deutsche Bank Over Suspicious Danske Cash

The Federal Reserve is examining how Deutsche Bank AG (DB) handled billions of dollars in suspicious transactions from Denmark's leading lender, Bloomberg reported citing people familiar with the matter.

The Fed's probe is in an early stage as it scrutinizes whether Deutsche Bank's U.S. operations adequately monitored funds from an Estonian branch of Danske Bank A/S, according to the reports.

Danske, which used correspondent banks such as Deutsche Bank to move money abroad, has admitted that much of about $230 billion that flowed through the tiny Estonian outpost may have been dirty.

The U.S. requires banks operating under its jurisdiction to scrutinize clients and their dealings to detect potential money laundering and alert authorities to suspicious transactions. The Fed is among regulators that ensure banks have adequate systems in place to fulfill those duties.

A Danske Bank whistle-blower who outlined the illicit flow of cash through that firm has said much of it passed through Deutsche Bank in the U.S. Deutsche Bank has been cooperating with the Fed, the report said.

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