SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 4: Information on the Company 47
Dodd-Frank will remove, effective in July 2011, a longstanding prohibition on the payment of interest on demand
deposits by our FDIC-insured bank subsidiaries and our New York branch. In addition, Dodd-Frank will require
that the lending limits applicable to our FDIC-insured bank subsidiaries and our New York branch take into account
(effective by January 2013 and July 2012, respectively) credit exposure arising from derivative transactions, and
that those applicable to our New York branch take into account securities borrowing and lending transactions and
repurchase and reverse repurchase agreements with counterparties. Also, under the so-called swap “push-out”
provisions of Dodd-Frank, the derivatives activities of FDIC-insured banks and U.S. branch offices of foreign banks
will be restricted, which may necessitate a restructuring of how we conduct our derivatives activities. In addition,
regulations which the Council, or the Consumer Financial Protection Bureau established under Dodd-Frank, may
adopt could affect the nature of the activities which a bank (including our FDIC-insured bank subsidiaries and our
New York branch) may conduct, and may impose restrictions and limitations on the conduct of such activities.
There are various qualitative and quantitative restrictions on the extent to which we and our nonbank subsidiaries
can borrow or otherwise obtain credit from our U.S. banking subsidiaries or engage in certain other transactions
involving those subsidiaries. In general, these transactions must be on terms that would ordinarily be offered to
unaffiliated entities, must be secured by designated amounts of specified collateral and are subject to volume
limitations. These restrictions also apply to certain transactions of our New York Branch with our U.S. broker-dealer
and certain of our other affiliates. Effective in July 2012, Dodd-Frank subjects credit exposure arising from derivative
transactions, securities borrowing and lending transactions, and repurchase/reverse repurchase agreements
to these collateral and volume limitations.
A major focus of U.S. governmental policy relating to financial institutions is aimed at preventing money laundering
and terrorist financing and compliance with economic sanctions in respect of designated countries or activities.
Failure of an institution to have policies and procedures and controls in place to prevent, detect and report money
laundering and terrorist financing could in some cases have serious legal, financial and reputational consequences
for the institution.
Our New York Branch
Our New York branch is licensed by the New York Superintendent of Banks to conduct a commercial banking
business and is required to maintain eligible high-quality assets with banks in the State of New York (up to a maximum
of U.S.$ 100 million of assets pledged so long as our New York branch remains “well-rated” by the New York
State Superintendent of Banks). Should our New York Branch cease to be “well-rated”, we may need to maintain
substantial additional amounts of eligible assets. The Superintendent of Banks may also establish asset maintenance
requirements for branches of foreign banks. Currently, no such requirement has been imposed upon our
New York branch.
The New York State Banking Law authorizes the Superintendent of Banks to take possession of the business and
property of a New York branch of a foreign bank under certain circumstances, generally involving violation of law,
conduct of business in an unsafe manner, impairment of capital, suspension of payment of obligations, or initiation
of liquidation proceedings against the foreign bank at its domicile or elsewhere. In liquidating or dealing with a
branch’s business after taking possession of a branch, only the claims of depositors and other creditors which
arose out of transactions with a branch are to be accepted by the Superintendent of Banks for payment out of the
business and property of the foreign bank in the State of New York, without prejudice to the rights of the holders of
such claims to be satisfied out of other assets of the foreign bank. After such claims are paid, the Superintendent
of Banks will turn over the remaining assets, if any, to the foreign bank or its duly appointed liquidator or receiver.