Deutsche Bank, Santander U.S. units likely to fail Fed stress test - WSJ
(Reuters) - European banks including Deutsche Bank AG and Banco Santander SA are likely to fail the U.S. Federal Reserve's stress test over shortcomings in how they measure and predict potential losses and risks, the Wall Street Journal reported, citing people familiar with the matter.
Deutsche Bank Trust Corp is expected to be found adequately capitalized by the Fed but will likely receive a warning on qualitative shortcomings, the newspaper said, citing people familiar with the matter.
Santander is also likely to fail for qualitative reasons, rather than because the stress test depleted its capital below regulatory minimums, the journal reported, citing the people.
Santander failed its first stress test run last year. Deutsche Bank is undergoing the U.S. stress test process for the first time.
The U.S. Federal Reserve declined to comment.
"Deutsche Bank Trust Corporation, which represents less than 5 percent of Deutsche Bank AG's total assets, was pleased to participate" in the stress tests this year, a spokeswoman told Reuters.
Santander declined to comment.
The Fed will disclose partial results of the test on March 5 and full results on March 11.
(Reporting By Sudarshan Varadhan in Bengaluru and Douwe Miedema in Washington; Editing by Sriraj Kalluvila)
