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Market Chatter: Deutsche Bank Faces ECB Review of Balance-Sheet Risk Allegations

BY MT Newswires | ECONOMIC | 11/25/25 05:06 AM EST

05:06 AM EST, 11/25/2025 (MT Newswires) -- Deutsche Bank (DB) is under European Central Bank review over allegations it understated risks and overstated financial strength, the Financial Times reported Tuesday, citing people familiar with the matter.

The ECB has reportedly questioned Deutsche Bank's (DB) netting practices while assessing capital rules and collateral treatment.

The review covers a recent letter from ex-employee Dario Schiraldi alleging that aggressive netting and off-balance-sheet techniques inflated the company's capital and leverage ratios, the publication reported.

Schiraldi also claims leverage exposures were understated by more than 200 billion euros ($230.68 billion) in 2024 financial statements, the FT reported.

The ECB has not decided whether to open a formal investigation into Deutsche Bank (DB), the publication added.

Deutsche Bank (DB) didn't immediately respond, while the ECB declined MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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