GLOBAL MARKETS

Deutsche fails Fed test

Deutsche Bank AG’S US subsidiary last week failed the second part of the US Federal Reserve’s annual stress test due to “widespread and critical deficiencies” in its capital planning controls.

Failing the stress test is not likely to affect the bank’s ability to pay dividends to shareholders, but it will require the lender to make substantial investment in technology, operations, risk management and personnel, and changes to its governance.

The bank in the previous week cleared the Fed’s easier first hurdle, which measured its capital levels against a severe recession, the strictest such test ever run by the Fed.

The Fed board’s unanimous objection to Deutsche’s US capital plan is another blow for the lender, which has been under scrutiny since S&P cut its rating and questioned its plan to return to profitability. Powering up in Europe

BMW has awarded a contract worth just over €1bn to lithium battery maker Contemporary Amperex Technology, allowing the Chinese company to build a factory to produce cells for electric cars in Europe, BMW spokesperson Glenn Schmidt said last week. The battery maker is scouting potential locations for a production facility in Europe. The east German state of Thuringia is encouraging it to use a site near its capital, Erfurt.