By Thomas Atkins and Alexander Hübner
FRANKFURT (Reuters) - U.S. authorities have begun settlement talks with Germany's Commerzbank and Deutsche Bank over their dealings with countries blacklisted by the United States, extending a crackdown on European banks at a delicate point in U.S.-German relations.
The talks with state and federal authorities have just begun, a source with direct knowledge of the regulatory investigations told Reuters, and the timing of a deal is unclear.
Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) declined to comment.
Washington has come down hard on European banks that have evaded their sanctions, imposing a record fine on France's BNP Paribas (PA:BNPP) last week and stoking resentment among bankers and officials at what they see as U.S. imperialism.
Commerzbank, Germany's second-largest lender, is 17 percent owned by the German government, and the settlement talks could further strain ties between Berlin and Washington, already at a low ebb due to allegations that a German man had worked as a double agent for U.S. intelligence.
Commerzbank is accused by U.S. authorities of transferring money through its U.S. operations on behalf of companies in Iran and Sudan and could pay at least $500 million in penalties, according to the New York Times.
The newspaper said a deal could be struck as soon as this summer and could pave the way for an agreement with Deutsche Bank.