The Federal Reserve has designated Deutsche Bank's sprawling US business in “troubled condition”, a rare censure for a major financial institution that contributed to constraints on its operations, according to people familiar with the matter.

The Fed’s downgrade, which took place about a year ago, is secret and has not been previously made public. The “troubled condition” status — one of the lowest designations employed by the Federal Reserve — has influenced moves by the bank to reduce risk-taking in areas like trading and lending to customers.