Deutsche Bank USA’s stress test estimate deviates from Fed’s by record amount
US unit of German bank underestimated capital and leverage hit in latest DFAST
Deutsche Bank USA overestimated the performance of its stressed capital in the latest Dodd-Frank Act stress test (DFAST) more than any bank since 2018, overshooting the hit to its Common Equity Tier 1 (CET1) capital ratio by 7.8 percentage points.
The US Federal Reserve projected the bank would see its CET1 ratio drop from 27.8% to a low of 14.5% during the nine-quarter recession scenario. However, Deutsche Bank’s US subsidiary was more optimistic, estimating a dip no lower than 22.3%.
Among the
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