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Deutsche Bank Says Software to Detect Money Laundering Had a Bug

157 points by oldjokes 7y ago

NikolaeVarius 7y ago
Bug or feature? Also, wonder how they're verifying "The bank maintained that no suspicious transactions had slipped through as a result."
- supakeen 7y ago
  Rerun a new release over the mutation log that it previously watched :)
- gruez 7y ago
  1. fix bug, run through the data again or 2. get a bunch of low level analysts or interns to review all past transactions
  - wahern 7y ago
    3. Executive: "Hey, Charlie, you think that bug missed anything?" Manager: "None that I'm aware of."
  - 0x262d 7y ago
    yep, just 10 years of financial data. I'm sure they could replay that easily lol
- sd_mikey 7y ago
  They should do some back testing to verify the validity of the updated software. This would uncover past fraudulent activity and possibly any new bugs introduced by the fix.
- SiempreViernes 7y ago
  Maybe they called all their "fishy" friends to confirm they caught all their bad stuff? More seriously, the background seems to be that DB has poor controls overall, so likely this tagger was simply combined with something too permissive and the error ends up not mattering very much.
- sametmax 7y ago
  Giving that I've already been approached by gov officials to create an accounting software that helps with creative book keeping, I say don't assume incompetence on this one.
- jerf 7y ago
  'Also, wonder how they're verifying "The bank maintained that no suspicious transactions had slipped through as a result."' I have no inside information, but I will observe there's a well-traveled road where organizations end up loudly announcing they couldn't find any exploitation of a given bug, or that it was limited to scope X, only to later announce that, oh, whoops, they found some, or that the scope was larger than they thought. Sometimes I find it easy to believe it's honest, like an ongoing security incident for a relatively transparent organization where the news is only hours old. Sometimes... I find it quite easy to believe it's not honest. I don't have enough info to decide in this particular case but it wouldn't shock my priors for it to be the latter here.
duxup 7y ago
It would be interesting to know what the bug is. I can't translate the German site as I can't really get to it due to a popup. A math problem, just not checking some transactions, something else?
- supakeen 7y ago
  "In one of these applications, two of the 121 parameters were not defined correctly. What the exact parameters are, the speaker did not want to say." Is all the further information in the German article.
  - duxup 7y ago
    Thank you.
  - Merem 7y ago
    Which resulted in an incomplete second check of payments. (Just to add the other small part.)
  - deleted 7y ago
    [deleted]
- lmb 7y ago
  It doesn't give any specifics. "2 of 121 parameters were configured incorrectly". Maybe host and port? ;)
smn1234 7y ago
how convenient, with this in context https://www.nytimes.com/2019/03/18/business/trump-deutsche-bank.html https://www.nytimes.com/2019/03/18/business/trump-deutsche-b...
- TACIXAT 7y ago
  Large loans and real estate deals are not the type of money laundering this software detects. It is looking for unusual transaction flows between accounts. For example, if an account receives large amounts money for inconsistent purposes (e.g. computer services and farm equipment), or has large amounts of money flow through it while maintaining a relatively low average balance (e.g. 10 million received and sent when the account normally has 40k in it). While money is absolutely laundered via real estate and art, that's not what this software detects. The podcast The Dark Money Files is really good if you want to learn more about this. [1] 1. https://www.buzzsprout.com/242645 https://www.buzzsprout.com/242645
  - wavefunction 7y ago
    >unusual transaction flows between accounts That's actually specifically what the linked article is about. Trump and Kushner were flagged for suspicious transactions involving Russians and Russian entities, not "loans and real estate deals" as far as anyone can tell.
    - TACIXAT 7y ago
      Really? I didn't see anything about Russia in that article. It seemed mostly about sweetheart loans for Trump in exchange for holding money or buying bonds from Deutsche.
      - atr_gz 7y ago
        The person you're replying to must have thought it was this article: https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html https://www.nytimes.com/2019/05/19/business/deutsche-bank-tr...
SrslyJosh 7y ago
How incredibly convenient.
- spikels 7y ago
  [deleted mean comment]
  - ceejayoz 7y ago
    "Banks are sometimes complicit or looking the other way WRT money laundering" is hardly a conspiracy theory. HSBC: https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-... UBS: https://www.bloomberg.com/news/articles/2019-02-20/switzerland-s-greatest-hits-a-brief-history-of-swiss-bank-fines https://www.bloomberg.com/news/articles/2019-02-20/switzerla... Unicredit: https://nypost.com/2019/04/15/italian-bank-will-pay-1-3b-fine-for-money-laundering/ https://nypost.com/2019/04/15/italian-bank-will-pay-1-3b-fin... Standard Chartered: https://www.theguardian.com/business/2019/apr/09/standard-chartered-fined-money-laundering-sanctions-breaches https://www.theguardian.com/business/2019/apr/09/standard-ch... ING: https://www.reuters.com/article/us-ing-groep-settlement-money-laundering/dutch-bank-ing-fined-900-million-for-failing-to-spot-money-laundering-idUSKCN1LK0PE https://www.reuters.com/article/us-ing-groep-settlement-mone...
  - dang 7y ago
    The GP comment wasn't substantive, but personal attacks will get you banned here, so please don't do that. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
deleted 7y ago
[deleted]
lawrenceg 7y ago
I see some similarities here between VW Dieselgate and DB. Must be a German thing :)
- blattimwind 7y ago
  Germany is already kinda the money laundering capital of the EU.
  - outside1234 7y ago
    But only because Switzerland isn't in the EU.
    - evenmore6789 7y ago
      Good call, sir, would you like to keep your job? Or your infrastructure or your Bridges? Asking for a well informed friend. And well uptateable friend if I might add. "swissparanoia" hashtag
spikels 7y ago
This is news?! All software has bugs. NYTimes is taking advantage of the general public’s ignorance of this fact to imply something sinister. Without additional information - such as it specifically targeted certain transactions - that is misleading. Remember this when you read articles about subjects you are not knowledgeable about. https://en.m.wikipedia.org/wiki/Gell-Mann_amnesia_effect https://en.m.wikipedia.org/wiki/Gell-Mann_amnesia_effect
- mola 7y ago
  On the other hand, these businesses cause the public ignorance For example companies that offer all sort of AI solution as some magic bullet. While covering up the inherent "bugs" in such systems.
- skywhopper 7y ago
  It's a bad headline and low-content article, but that's not really the point. The bug presumably made some filter for suspicious transactions ineffective, and this was detected by some sort of manual process audit. The headline should have been "Deutsche Bank fails to properly audit its money laundering detection for 10 years".
  - deleted 7y ago
    [deleted]
- PhasmaFelis 7y ago
  When a company publicly apologizes for a bug and says things like "Deutsche Bank is working on correcting the error as quickly as possible and is in close contact with the regulators," a reasonable person infers that they're talking about a serious issue in core functionality, not a GUI rendering glitch.
- fareesh 7y ago
  It seems to me as an outsider that everyone's standard for honesty has been reduced because it's an acceptable sacrifice if it means sliming the opposing political party. This has undertones of conveying that the President "got away" with this activity, which is the intended takeaway from the article. The quality of journalism seems to have been hit hardest by this philosophy. For over a year all of us around the world have been hearing about something called a Mueller Investigation from the news media in the USA, and now despite the fact that it has cleared the President and his campaign of the allegations made, not a single media outlet has walked back the insinuations made with this style of reporting which, through lawyerspeak essentially declared him guilty without saying it outright, but close enough for it to convince the general public. It's really unfortunate because the media has a very important responsibility. Based on the behavior of journalists that I see on social media, it seems like overgrown children are running things. One such example is a lady named Sarah Jeong who has written some really disgusting tweets on social media, and was given a relatively important position at NYT.
bla3 7y ago
Subjectively it feels like NYT publishes a lot more negative articles about Deutsche Bank than about any other bank, or at least those articles get upvoted much more frequently here. Does anyone know what's up with that? I would've assumed that most banks are equally terrible.
- fwip 7y ago
  Deutsche Bank is currently implicated in (or at the very least, relevant to) ongoing news regarding the US President's finances. That makes it more newsworthy.
  - deleted 7y ago
    [deleted]
  - evenmore6789 7y ago
    Old habits die hard. Watch the movie 'Leon, the Professional, https://www.imdb.com/title/tt0110413/ https://www.imdb.com/title/tt0110413/ , and you will know who you are. Old habits die hard. Cold or no cold/hot coffee.
  - repolfx 7y ago
    So, are the Germans the new Russians then? Sounds like having failed to pin a dozen or so different crimes on Trump now his enemies are trying to harass his banks in retaliation for working with him? A classic strategy. Any bank can be found guilty of money laundering if the authorities want because the wording of the laws are so vague.
    - rconti 7y ago
      If you're interested, this dates back decades, and Deutsche Bank has been implicated in a lot of money laundering over the years. If you're interested, there was a great podcast on the president's reliance on Deutsche Bank overlooking his never-ending bankruptcies and refusal to pay back loans, when no other bank would touch him. https://www.npr.org/programs/fresh-air/2019/05/09/721726619/fresh-air-for-may-9-2019-deutsche-bank-and-trumps-finances https://www.npr.org/programs/fresh-air/2019/05/09/721726619/... If you're not interested, you're just trolling.
andrewstuart2 7y ago
As someone who works at a financial institution, it's news generally because money laundering activity tends to be highly profitable for banks, since they get to collect fees on those transactions. There are almost no incentives for us to flag transactions on our own (unless we're being super humanitarian) without legislation/regulation, because as long as they get their money there's no downside except for victims of the crimes that the money originally originated from. At least in my opinion, the legislation and big-deal-making is merited in cases like this, for the benefit of society.
- candiodari 7y ago
  As an ex-consultant in the financial services sector I strongly disagree with your assessment: "there's no downside except for victims of the crimes that the money originally originated from." Why don't you detail what happens to people who get flagged by this software. Ie either send or receive suspected laundered money and what the odds are of such a flag actually resulting in a conviction. If you get "flagged", ALL your funds are immediately blocked, your access restricted however long they wish (meaning think 6 months). The odds of a flag leading to a conviction are not even 2%. Even among those 2%, the vast majority of "money launderers" are victims of deception (for example the old "I'll send you money if you pay me 5/10/20% less of that money on a different account"). So no victims ? The truth is that a few thousand people per month (never saw absolute numbers but that seems a lower bound to me, and this is for a small EU country) are denied access to their own money for months (sometimes years), without so much as an explanation (it is illegal (and legally highly stupid) for the bank to state for what reason your accounts are blocked). Not one of their accounts, all of them. Needless to say, finding stories where this has resulted in making a person or even entire family homeless is not hard. "No downside". Well, not for banks. Not for governments. For everyone else, extreme downsides.
  - colanderman 7y ago
    I think you misread the comment. At least, I read it as "no downside to ignore money laundering", not "no downside to crack down on it".
  - 7y ago
eigenvector 7y ago
If you read the original article cited by the NYT (it's in German), it is using 'bug' not in the sense that all software has bugs, but in the sense of 'basic functionality was not working'. And that should be alarming, for critical software. https://translate.google.com/translate?hl=&sl=de&tl=en&u=https%3A%2F%2Fwww.sueddeutsche.de%2Fwirtschaft%2Fdeutsche-bank-it-panne-1.4456987 https://translate.google.com/translate?hl=&sl=de&tl=en&u=htt...
- tantalor 7y ago
  How can it possibly be both "basic functionality was not working" (high severity) and "no suspicious transactions had slipped through" (low severity)?
  - deleted 7y ago
    [deleted]
  - Harvey-Specter 7y ago
    Pretty easy to understand if you swap what the software is detecting to "asteroids which are on impact course with earth". Basic functionality is to detect asteroids which are on a collision course with earth. The fact that no undetected asteroids struck earth doesn't mean the software worked or didn't work, nor does it mean that detecting asteroids which are on a collosion course with earth is not basic functionality.
    - giarc 7y ago
      Absence of evidence doesn't mean evidence of absence.
- notfromhere 7y ago
  I'm sure they knew, kept the problem around so that whenever they inevitably got caught they could point to the software glitch. Deutsche Bank has been revealed to be systematically laundering Russian cash for years, to the point where you see a headline about "bank gets caught laundering Russian money" its almost always DB.
outside1234 7y ago
Yeah right. Just like VW's emissions bug.
- hef19898 7y ago
  Somebody say again we Germans aren't good at software!
  - deleted 7y ago
    [deleted]
slg 7y ago
This is a little different because Deutsche Bank is already under scrutiny in this area and therefore this is one piece of a larger story. It is similar to when Facebook has bugs that expose private user information. It raises questions like whether the "bug" is truly a bug or whether it is intended behavior, whether no bug exists and this is simply an easy excuse for inappropriate actions, whether the company actually cares about fixing the issue, and so on. EDIT: I am sure what happened in this thread. Several comments, including this one, were decoupled from the comment they were responding to even though the original wasn't deleted or flagged. Removing that context makes some of these comments harder to follow.
chasingthewind 7y ago
The Base Rate Fallacy [0] suggests there's often a lot more true negatives than true positives. In this case a true negative is ignoring a non-fraudulent transaction and a true-positive is catching a fraudulent transaction. As someone who never engages in fraudulent transactions, if I were a DB customer I'd be much more concerned about the false-negative rate of such software. [0] https://en.wikipedia.org/wiki/Base_rate_fallacy https://en.wikipedia.org/wiki/Base_rate_fallacy
esoterae 7y ago
bulllllllllllllllshit.
- dang 7y ago
  Please don't post unsubstantive comments here.
throwawaymanbot 7y ago
how... convenient.... (Austin powers laugh!)
maxencecornet 7y ago
Paul Jorion, a french writer and ex-"the Bank of the European Union" employee, said that he was pushed out of the company when he revealed a bug in risk-calculation software I'm pretty sure this bug was known for some time as well
- deleted 7y ago
  [deleted]
  - jjtheblunt 7y ago
    no kidding
carreau 7y ago
> bug for 10 years *backdoor
chockZ 7y ago
You need to consider the larger context of this story, especially given Deutsche Bank's notorious reputation for allowing money laundering to happen under it's watch. Also, take a look at the story published last week about American Deutsche Bank executives refusing to pass along information to federal regulators regarding suspicious transactions involving the President of the United States and his son-in-law. https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html https://www.nytimes.com/2019/05/19/business/deutsche-bank-tr...
deleted 7y ago
[deleted]
YeGoblynQueenne 7y ago
Financial software doesn't have bugs like web applications have bugs. In one place I worked the software was older than every person who worked in the company (from the time of punched cards) and the system had 5-9s uptime. The majority of bugs had been caught and fixed by then and to change anything in the software you had to submit a ten-page form. Plus, nobody I knew ever got to work on the actual code running the company's main business - you only got to write job running scripts and the like. In that kind of shop a bug is a big deal.
- coldcode 7y ago
  It's not a bug it's a feature: the bank rakes in money and no one is the wiser.
otakucode 7y ago
Financial software is special. It has to be. The value of our currency is literally directly dependent upon it. Imagine what would happen if tomorrow we woke up and it was revealed that there had been a persistent manipulation of the financial systems. When Walmart or some other large company goes to another country and says "we have $5 million, we need good and services" they would be met with "we don't believe those numbers in your bank software MEAN anything. PROVE they represent money and aren't just a bug." At that point, everything stops. Well, everything that has no built-in means of proving legitimacy. I've read multiple times that the only real thing Bitcoin offers is protection against counterfeiting and no one gives a damn about that because faith in the system backs our money so counterfeiting isn't a big problem. In the hypothetical scenario, though, it becomes the primary problem, and overnight only cryptocurrency can be proven to mean anything at all. Everything else would just be unreliable nonsense numbers based on rotted code.
deleted 7y ago
[deleted]
pablooliva 7y ago
The software was as buggy as management overseeing regulation of shady transactions at the firm: https://duckduckgo.com/?q=deutsche+bank+whistleblower&t=canonical&ia=web https://duckduckgo.com/?q=deutsche+bank+whistleblower&t=cano...
NTDF9 7y ago
One bug? That's laughable to anyone writing any software
mmanfrin 7y ago
Cue $20 mil fine and $X bil profits washed clean.
sova 7y ago
Just one bug though. And it sounds like they found it. Phew.
NicoJuicy 7y ago
For the ones that don't see the links, Trump had to show his bank records of Deutsche Bank in the accusation of Russian money laundering. And now they found a bug :)
kumarvvr 7y ago
Interesting timing, considering all the subpoenas they are supposed to reply to.
craftoman 7y ago
I remember similar answer was given from a bunch of corrupted employees after the Greek state found that their anti-corruption algorithms (written in Python btw) stopped reporting for incidents. In the end, after the inspection from major supervisors found that those guys working at the post over there "accidentally disabled" the reporting service and blamed the software.

157 points by oldjokes 7y ago

Bug or feature? Also, wonder how they're verifying "The bank maintained that no suspicious transactions had slipped through as a result."

supakeen 7y ago
Rerun a new release over the mutation log that it previously watched :)
gruez 7y ago
1. fix bug, run through the data again or 2. get a bunch of low level analysts or interns to review all past transactions
- wahern 7y ago
  3. Executive: "Hey, Charlie, you think that bug missed anything?" Manager: "None that I'm aware of."
- 0x262d 7y ago
  yep, just 10 years of financial data. I'm sure they could replay that easily lol
sd_mikey 7y ago
They should do some back testing to verify the validity of the updated software. This would uncover past fraudulent activity and possibly any new bugs introduced by the fix.
SiempreViernes 7y ago
Maybe they called all their "fishy" friends to confirm they caught all their bad stuff? More seriously, the background seems to be that DB has poor controls overall, so likely this tagger was simply combined with something too permissive and the error ends up not mattering very much.
sametmax 7y ago
Giving that I've already been approached by gov officials to create an accounting software that helps with creative book keeping, I say don't assume incompetence on this one.
jerf 7y ago
'Also, wonder how they're verifying "The bank maintained that no suspicious transactions had slipped through as a result."' I have no inside information, but I will observe there's a well-traveled road where organizations end up loudly announcing they couldn't find any exploitation of a given bug, or that it was limited to scope X, only to later announce that, oh, whoops, they found some, or that the scope was larger than they thought. Sometimes I find it easy to believe it's honest, like an ongoing security incident for a relatively transparent organization where the news is only hours old. Sometimes... I find it quite easy to believe it's not honest. I don't have enough info to decide in this particular case but it wouldn't shock my priors for it to be the latter here.

duxup 7y ago

It would be interesting to know what the bug is. I can't translate the German site as I can't really get to it due to a popup. A math problem, just not checking some transactions, something else?

supakeen 7y ago
"In one of these applications, two of the 121 parameters were not defined correctly. What the exact parameters are, the speaker did not want to say." Is all the further information in the German article.
- duxup 7y ago
  Thank you.
- Merem 7y ago
  Which resulted in an incomplete second check of payments. (Just to add the other small part.)
- deleted 7y ago
  [deleted]
lmb 7y ago
It doesn't give any specifics. "2 of 121 parameters were configured incorrectly". Maybe host and port? ;)

smn1234 7y ago

how convenient, with this in context https://www.nytimes.com/2019/03/18/business/trump-deutsche-bank.html https://www.nytimes.com/2019/03/18/business/trump-deutsche-b...

TACIXAT 7y ago
Large loans and real estate deals are not the type of money laundering this software detects. It is looking for unusual transaction flows between accounts. For example, if an account receives large amounts money for inconsistent purposes (e.g. computer services and farm equipment), or has large amounts of money flow through it while maintaining a relatively low average balance (e.g. 10 million received and sent when the account normally has 40k in it). While money is absolutely laundered via real estate and art, that's not what this software detects. The podcast The Dark Money Files is really good if you want to learn more about this. [1] 1. https://www.buzzsprout.com/242645 https://www.buzzsprout.com/242645
- wavefunction 7y ago
  >unusual transaction flows between accounts That's actually specifically what the linked article is about. Trump and Kushner were flagged for suspicious transactions involving Russians and Russian entities, not "loans and real estate deals" as far as anyone can tell.
  - TACIXAT 7y ago
    Really? I didn't see anything about Russia in that article. It seemed mostly about sweetheart loans for Trump in exchange for holding money or buying bonds from Deutsche.
    - atr_gz 7y ago
      The person you're replying to must have thought it was this article: https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html https://www.nytimes.com/2019/05/19/business/deutsche-bank-tr...

SrslyJosh 7y ago

How incredibly convenient.

spikels 7y ago
[deleted mean comment]
- ceejayoz 7y ago
  "Banks are sometimes complicit or looking the other way WRT money laundering" is hardly a conspiracy theory. HSBC: https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-... UBS: https://www.bloomberg.com/news/articles/2019-02-20/switzerland-s-greatest-hits-a-brief-history-of-swiss-bank-fines https://www.bloomberg.com/news/articles/2019-02-20/switzerla... Unicredit: https://nypost.com/2019/04/15/italian-bank-will-pay-1-3b-fine-for-money-laundering/ https://nypost.com/2019/04/15/italian-bank-will-pay-1-3b-fin... Standard Chartered: https://www.theguardian.com/business/2019/apr/09/standard-chartered-fined-money-laundering-sanctions-breaches https://www.theguardian.com/business/2019/apr/09/standard-ch... ING: https://www.reuters.com/article/us-ing-groep-settlement-money-laundering/dutch-bank-ing-fined-900-million-for-failing-to-spot-money-laundering-idUSKCN1LK0PE https://www.reuters.com/article/us-ing-groep-settlement-mone...
- dang 7y ago
  The GP comment wasn't substantive, but personal attacks will get you banned here, so please don't do that. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

deleted 7y ago

[deleted]

lawrenceg 7y ago

I see some similarities here between VW Dieselgate and DB. Must be a German thing :)

blattimwind 7y ago
Germany is already kinda the money laundering capital of the EU.
- outside1234 7y ago
  But only because Switzerland isn't in the EU.
  - evenmore6789 7y ago
    Good call, sir, would you like to keep your job? Or your infrastructure or your Bridges? Asking for a well informed friend. And well uptateable friend if I might add. "swissparanoia" hashtag

spikels 7y ago

This is news?! All software has bugs. NYTimes is taking advantage of the general public’s ignorance of this fact to imply something sinister. Without additional information - such as it specifically targeted certain transactions - that is misleading. Remember this when you read articles about subjects you are not knowledgeable about. https://en.m.wikipedia.org/wiki/Gell-Mann_amnesia_effect https://en.m.wikipedia.org/wiki/Gell-Mann_amnesia_effect

mola 7y ago
On the other hand, these businesses cause the public ignorance For example companies that offer all sort of AI solution as some magic bullet. While covering up the inherent "bugs" in such systems.
skywhopper 7y ago
It's a bad headline and low-content article, but that's not really the point. The bug presumably made some filter for suspicious transactions ineffective, and this was detected by some sort of manual process audit. The headline should have been "Deutsche Bank fails to properly audit its money laundering detection for 10 years".
- deleted 7y ago
  [deleted]
PhasmaFelis 7y ago
When a company publicly apologizes for a bug and says things like "Deutsche Bank is working on correcting the error as quickly as possible and is in close contact with the regulators," a reasonable person infers that they're talking about a serious issue in core functionality, not a GUI rendering glitch.
fareesh 7y ago
It seems to me as an outsider that everyone's standard for honesty has been reduced because it's an acceptable sacrifice if it means sliming the opposing political party. This has undertones of conveying that the President "got away" with this activity, which is the intended takeaway from the article. The quality of journalism seems to have been hit hardest by this philosophy. For over a year all of us around the world have been hearing about something called a Mueller Investigation from the news media in the USA, and now despite the fact that it has cleared the President and his campaign of the allegations made, not a single media outlet has walked back the insinuations made with this style of reporting which, through lawyerspeak essentially declared him guilty without saying it outright, but close enough for it to convince the general public. It's really unfortunate because the media has a very important responsibility. Based on the behavior of journalists that I see on social media, it seems like overgrown children are running things. One such example is a lady named Sarah Jeong who has written some really disgusting tweets on social media, and was given a relatively important position at NYT.

bla3 7y ago

Subjectively it feels like NYT publishes a lot more negative articles about Deutsche Bank than about any other bank, or at least those articles get upvoted much more frequently here. Does anyone know what's up with that? I would've assumed that most banks are equally terrible.

fwip 7y ago
Deutsche Bank is currently implicated in (or at the very least, relevant to) ongoing news regarding the US President's finances. That makes it more newsworthy.
- deleted 7y ago
  [deleted]
- evenmore6789 7y ago
  Old habits die hard. Watch the movie 'Leon, the Professional, https://www.imdb.com/title/tt0110413/ https://www.imdb.com/title/tt0110413/ , and you will know who you are. Old habits die hard. Cold or no cold/hot coffee.
- repolfx 7y ago
  So, are the Germans the new Russians then? Sounds like having failed to pin a dozen or so different crimes on Trump now his enemies are trying to harass his banks in retaliation for working with him? A classic strategy. Any bank can be found guilty of money laundering if the authorities want because the wording of the laws are so vague.
  - rconti 7y ago
    If you're interested, this dates back decades, and Deutsche Bank has been implicated in a lot of money laundering over the years. If you're interested, there was a great podcast on the president's reliance on Deutsche Bank overlooking his never-ending bankruptcies and refusal to pay back loans, when no other bank would touch him. https://www.npr.org/programs/fresh-air/2019/05/09/721726619/fresh-air-for-may-9-2019-deutsche-bank-and-trumps-finances https://www.npr.org/programs/fresh-air/2019/05/09/721726619/... If you're not interested, you're just trolling.

andrewstuart2 7y ago

As someone who works at a financial institution, it's news generally because money laundering activity tends to be highly profitable for banks, since they get to collect fees on those transactions. There are almost no incentives for us to flag transactions on our own (unless we're being super humanitarian) without legislation/regulation, because as long as they get their money there's no downside except for victims of the crimes that the money originally originated from. At least in my opinion, the legislation and big-deal-making is merited in cases like this, for the benefit of society.

candiodari 7y ago
As an ex-consultant in the financial services sector I strongly disagree with your assessment: "there's no downside except for victims of the crimes that the money originally originated from." Why don't you detail what happens to people who get flagged by this software. Ie either send or receive suspected laundered money and what the odds are of such a flag actually resulting in a conviction. If you get "flagged", ALL your funds are immediately blocked, your access restricted however long they wish (meaning think 6 months). The odds of a flag leading to a conviction are not even 2%. Even among those 2%, the vast majority of "money launderers" are victims of deception (for example the old "I'll send you money if you pay me 5/10/20% less of that money on a different account"). So no victims ? The truth is that a few thousand people per month (never saw absolute numbers but that seems a lower bound to me, and this is for a small EU country) are denied access to their own money for months (sometimes years), without so much as an explanation (it is illegal (and legally highly stupid) for the bank to state for what reason your accounts are blocked). Not one of their accounts, all of them. Needless to say, finding stories where this has resulted in making a person or even entire family homeless is not hard. "No downside". Well, not for banks. Not for governments. For everyone else, extreme downsides.
- colanderman 7y ago
  I think you misread the comment. At least, I read it as "no downside to ignore money laundering", not "no downside to crack down on it".
- 7y ago

eigenvector 7y ago

If you read the original article cited by the NYT (it's in German), it is using 'bug' not in the sense that all software has bugs, but in the sense of 'basic functionality was not working'. And that should be alarming, for critical software. https://translate.google.com/translate?hl=&sl=de&tl=en&u=https%3A%2F%2Fwww.sueddeutsche.de%2Fwirtschaft%2Fdeutsche-bank-it-panne-1.4456987 https://translate.google.com/translate?hl=&sl=de&tl=en&u=htt...

tantalor 7y ago
How can it possibly be both "basic functionality was not working" (high severity) and "no suspicious transactions had slipped through" (low severity)?
- deleted 7y ago
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- Harvey-Specter 7y ago
  Pretty easy to understand if you swap what the software is detecting to "asteroids which are on impact course with earth". Basic functionality is to detect asteroids which are on a collision course with earth. The fact that no undetected asteroids struck earth doesn't mean the software worked or didn't work, nor does it mean that detecting asteroids which are on a collosion course with earth is not basic functionality.
  - giarc 7y ago
    Absence of evidence doesn't mean evidence of absence.
notfromhere 7y ago
I'm sure they knew, kept the problem around so that whenever they inevitably got caught they could point to the software glitch. Deutsche Bank has been revealed to be systematically laundering Russian cash for years, to the point where you see a headline about "bank gets caught laundering Russian money" its almost always DB.

outside1234 7y ago

Yeah right. Just like VW's emissions bug.

hef19898 7y ago
Somebody say again we Germans aren't good at software!
- deleted 7y ago
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slg 7y ago

This is a little different because Deutsche Bank is already under scrutiny in this area and therefore this is one piece of a larger story. It is similar to when Facebook has bugs that expose private user information. It raises questions like whether the "bug" is truly a bug or whether it is intended behavior, whether no bug exists and this is simply an easy excuse for inappropriate actions, whether the company actually cares about fixing the issue, and so on. EDIT: I am sure what happened in this thread. Several comments, including this one, were decoupled from the comment they were responding to even though the original wasn't deleted or flagged. Removing that context makes some of these comments harder to follow.

chasingthewind 7y ago

The Base Rate Fallacy [0] suggests there's often a lot more true negatives than true positives. In this case a true negative is ignoring a non-fraudulent transaction and a true-positive is catching a fraudulent transaction. As someone who never engages in fraudulent transactions, if I were a DB customer I'd be much more concerned about the false-negative rate of such software. [0] https://en.wikipedia.org/wiki/Base_rate_fallacy https://en.wikipedia.org/wiki/Base_rate_fallacy

esoterae 7y ago

bulllllllllllllllshit.

dang 7y ago
Please don't post unsubstantive comments here.

throwawaymanbot 7y ago

how... convenient.... (Austin powers laugh!)

maxencecornet 7y ago

Paul Jorion, a french writer and ex-"the Bank of the European Union" employee, said that he was pushed out of the company when he revealed a bug in risk-calculation software I'm pretty sure this bug was known for some time as well

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- jjtheblunt 7y ago
  no kidding

carreau 7y ago

> bug for 10 years *backdoor

chockZ 7y ago

You need to consider the larger context of this story, especially given Deutsche Bank's notorious reputation for allowing money laundering to happen under it's watch. Also, take a look at the story published last week about American Deutsche Bank executives refusing to pass along information to federal regulators regarding suspicious transactions involving the President of the United States and his son-in-law. https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html https://www.nytimes.com/2019/05/19/business/deutsche-bank-tr...

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YeGoblynQueenne 7y ago

Financial software doesn't have bugs like web applications have bugs. In one place I worked the software was older than every person who worked in the company (from the time of punched cards) and the system had 5-9s uptime. The majority of bugs had been caught and fixed by then and to change anything in the software you had to submit a ten-page form. Plus, nobody I knew ever got to work on the actual code running the company's main business - you only got to write job running scripts and the like. In that kind of shop a bug is a big deal.

coldcode 7y ago
It's not a bug it's a feature: the bank rakes in money and no one is the wiser.

otakucode 7y ago

Financial software is special. It has to be. The value of our currency is literally directly dependent upon it. Imagine what would happen if tomorrow we woke up and it was revealed that there had been a persistent manipulation of the financial systems. When Walmart or some other large company goes to another country and says "we have $5 million, we need good and services" they would be met with "we don't believe those numbers in your bank software MEAN anything. PROVE they represent money and aren't just a bug." At that point, everything stops. Well, everything that has no built-in means of proving legitimacy. I've read multiple times that the only real thing Bitcoin offers is protection against counterfeiting and no one gives a damn about that because faith in the system backs our money so counterfeiting isn't a big problem. In the hypothetical scenario, though, it becomes the primary problem, and overnight only cryptocurrency can be proven to mean anything at all. Everything else would just be unreliable nonsense numbers based on rotted code.

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pablooliva 7y ago

The software was as buggy as management overseeing regulation of shady transactions at the firm: https://duckduckgo.com/?q=deutsche+bank+whistleblower&t=canonical&ia=web https://duckduckgo.com/?q=deutsche+bank+whistleblower&t=cano...

NTDF9 7y ago

One bug? That's laughable to anyone writing any software

mmanfrin 7y ago

Cue $20 mil fine and $X bil profits washed clean.

sova 7y ago

Just one bug though. And it sounds like they found it. Phew.

NicoJuicy 7y ago

For the ones that don't see the links, Trump had to show his bank records of Deutsche Bank in the accusation of Russian money laundering. And now they found a bug :)

kumarvvr 7y ago

Interesting timing, considering all the subpoenas they are supposed to reply to.

craftoman 7y ago

I remember similar answer was given from a bunch of corrupted employees after the Greek state found that their anti-corruption algorithms (written in Python btw) stopped reporting for incidents. In the end, after the inspection from major supervisors found that those guys working at the post over there "accidentally disabled" the reporting service and blamed the software.