Regulators in Germany hover over Deutsche

Michael Bow
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GERMAN regulators yesterday refused to be drawn on any plans to probe long-standing allegations that Deutsche Bank hid as much as €12bn (£10.2bn) in paper losses by miscalculating some credit derivatives between 2007 and 2009.

Germany’s central bank Bundesbank, which acts as Deutsche Bank’s watchdog, told City A.M. it had an “obligation” to investigate all banks and any accusations against them, but would not comment on individual investigations.

Deutsche Bank previously said that it had investigated the allegations and they were “wholly unfounded”.

It follows reports in June 2011 that a US whistle blower had claimed a derivatives trader in London may have improperly valued assets in a portfolio to hide paper trading losses.

The US Securities and Exchange Commission is understood to have opened its own investigation into allegations in 2010.

Any probe by German regulators – which includes Bafin – would be an escalation of the claims.

Reports last night suggested German regulators would travel to the US to look into a probe.

Deutsche previously denied the claims when the allegations resurfaced in December 2012.

It said at the time: “The allegations of financial misstatements, which are more than two and a half years old and were publicly reported in June 2011, have been the subject of a careful and thorough investigation, and they are wholly unfounded.”

“Moreover, the investigation revealed that these allegations stem from people without responsibility for, or personal knowledge of, key facts and information.”