Deutsche Bank’s Failed Stress Test is Not a Deficiency but Merely a “Weakness” according to FDIC

The Federal Reserve Board and the Federal Deposit Insurance Corporation on Thursday announced that the resolution plans of four foreign-based banks had weaknesses, but did not have “deficiencies,” which are weaknesses severe enough to result in additional prudential requirements if not corrected.

The agencies determined that the plans of the four firms–Barclays, Credit Suisse, Deutsche Bank, and UBS–have “shortcomings,” which are less severe weaknesses that require additional work in their next plan.

These shortcomings in the four firms’ plans include weaknesses in how each firm communicates and coordinates between its U.S. operations and its foreign parent in stress.