Failing Deutsche Bank Lost $1.6 Billion, Conspired to Hide Bond Bet Gone Wrong
Germany’s largest lender Deutsche Bank is in the news again for the wrong reasons. According to the Wall Street Journal, Deutsche Bank lost approximately $1.6 billion over a decade in a bond bet gone awry.
Interestingly, Deutsche Bank has never publicly revealed the loss. This is likely to generate controversy over the bank’s corporate governance structures. As recently as last year the possibility of restating past financial results to reflect the loss was discussed. However, this proposal was shot down.
Deutsche Bank Sold $7.8 Billion Worth of Muni Bonds at a Loss
The $1.6 billion loss stemmed from municipal bonds worth $7.8 billion that the German lender purchased in 2007. Deutsche Bank also took out default protection insurance on the bonds from Berkshire Hathaway at a cost of $140 million. In subsequent years the lender went on to sell the municipal bonds at a loss. Deutsche Bank also retired the default protection insurance.
Read the full story on CCN.com.
