NEW YORK (
is planning to restructure its U.S. subsidiary, Taunus Corp., in order to sidestep capital limits in the Dodd-Frank Act.
The German bank is considering changing the status of Taunus so it is no longer classified as a bank-holding company, according to a report by
The report says that Deutsche Bank may have to pump $20 billion in new capital to offset losses in the unit because Taunus' Tier 1 leverage ratio is at negative 1.3 percent, far below the 4 percent required by the
. If the bank pumps so much capital into the unit, it may make the bank vulnerable as the European banks are undergoing stress tests.
To change the bank company holding status, Deutsche Bank would have to move the banking unit, Deutsche Bank Trust Corp., out of the U.S. subsidiary and into the bank's new Cayman Islands subsidiary, according to the report. By doing this, Deutsche Bank will still be able to operate as a bank within the U.S. Taunus would still house Deutsche Bank Securities Inc., the investment-banking arm and other nonbanking assets, the articles states.
Shareholders would have to approve of the plans prior to changes taking place.
Deutsche Bank did not return calls for comment.
--Written by Maria Woehr in New York.
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