Rep. Katie Porter (D-CA) grilled Treasury Secretary Steve Mnuchin over massive losses posted by Deutsche Bank — and over the lender’s inaction over suspicious transactions by President Donald Trump.
The California Democrat asked Mnuchin during a House Financial Services Committee hearing about the German bank’s recent $3 billion loss, and whether Treasury Department banking deregulation could put investors in its U.S. subsidiary at risk.
“How did Deutsche Bank manage to lose $3 billion and not see it coming?” she asked. “How the hell do you lose $3 billion and not see that coming?”
Mnuchin said “a lot of people” lost $3 billion, and he agreed that U.S. officials didn’t want to see that happen again.
“I am familiar with some of their really bad investments, and I find it really hard to believe they made them,” Mnuchin said.
Porter pointed out that Deutsche Bank had failed its own stress tests and engaged in questionable international activity in Iran, Libya, Russia and Syria — and involving the U.S. president.
“It came to light that Deutsche Bank had willfully decided to ignore suspicious activity reports with regard to the president and his son-in-law,” Porter said. “What is your plan to hold Deutsche Bank responsible for failing to do appropriate oversight and respond to the regulatory controls in place with regard to the SARs?”
Mnuchin said he could not comment publicly on SARs, which he read news accounts on, but promised to follow up with the committee.
“Are you planning to ask the German banking authority also to do additional oversight of Deutsche Bank, especially now that we regulate them much less than we used to?” Porter said.
Mnuchin tried to assure Porter that Deutsche Bank’s activity would not jeopardize the U.S. financial system, and he promised to speak with his European counterparts about the issue.