A major European bank has decided to change the legal status of its US division in order to avoid fresh capital rules imposed in the wake of the recession, it has emerged.
Deutsche Bank has altered its listing in America so it is no longer officially regarded as a "bank-holding" company, meaning it may be able to avoid having to comply with the new system.
Global regulators have created a range of strict guidelines in the recent past which have been specifically designed to ensure all financiers maintain a healthy balance sheet, therefore negating the possibility of more taxpayer-funded bailouts.
However, following this change in status, Deutsche Bank could now be in a position whereby it is not legally obliged to hold the same level of capital as its rivals in the US.
Michael Barr, an ex-Treasury official in the US, said such moves - which could be copied by other banks - "ought to be severely scrutinized by the Fed".
By Tony Aynsley