Deutsche Bank ‘seeks to fudge US fine’
A source says Germany’s biggest bank wants lending to equity and hedge funds to count
New York — Deutsche Bank is supposed to give relief to subprime mortgage borrowers as part of a $7.2bn settlement with the US government. It is considering an unusual approach to meeting that requirement: lending money to private equity firms and hedge funds. Germany’s biggest bank, dogged in 2016 by questions about its capital levels, is exploring ways to avoid using its balance sheet to buy soured mortgages that it can partially forgive, according to a person with knowledge of the matter. One option under review was to lend to firms such as Lone Star Funds, which specialise in buying bad mortgages from government auctions and lowering consumers’ obligations. Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment, as did the department of justice. Preliminary terms of the agreement with the department of justice included $4.1bn of relief to borrowers over at least five years, Deutsche Bank said in December. The bank is still finalising the settlement, which resolves ...
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