The Wall Street Journal reported late Tuesday that the Federal Reserve Bank of New York had discovered a long list of financial reporting problems, largely stemming from poor internal controls and systems.

Excerpts from a letter by the FRBNY to Deutsche also complained that senior management had repeatedly failed to address its concerns, which dated back to 2002.

“The size and breadth of errors strongly suggest that the firm’s entire U.S. regulatory reporting structure requires wide-ranging remedial action,” it said.

Although it didn’t name names, a large part of the U.S. operations of Deutsche for much of the last decade were the responsibility of the bank’s current co-chief executive, Anshu Jain. The U.S. operations are currently headed by Jacques Brand.

The letter, dated Dec. 11, said the failings “expose the firm to significant operational risk and misstated regulatory reports”–a phrase that analysts took to imply that Deutsche was understating the riskiness of its assets, implying that it may be required to raise even more capital to bolster its balance sheet.

Deutsche has operated in recent years with a lower capital ratio than most of its biggest rivals, and only last month issued €8.5 billion capital in the form of new shares.

Like all of the world’s largest banks, Deutsche gets leeway from its regulators to determine for itself how risky its assets are, but such systems have come under increasing scrutiny since the financial crisis, which exposed widespread under-reporting of risks, especially at European banks.

Partly as a result of that, U.S. regulators are introducing new rules that will force international banks to hold more capital in the U.S. to protect them against potential losses. The Fed aims to impose higher capital ratios than the minimum foreseen under the global ‘Basel III’ rules agreed in 2011.

The new rules require far more capital to be held specifically against risky or volatile assets, something that affects Deutsche more than most because of the vast size of its bond-trading operations.

It wasn’t immediately clear how the New York Fed has responded to efforts by Deutsche to remedy the issues it raised since writing that letter in December. The bank says it is hiring 500 extra staff in the U.S. to improve its internal systems.

“We have been working diligently to further strengthen our systems and controls and are committed to being best in class,” the WSJ quoted a Deutsche spokesman as saying. The bank’s press office in Frankfurt declined to add to that early Wednesday.

By 0530 EDT, the shares had recovered somewhat to be down 1.2% in Frankfurt.