Deutsche Bank’s Staggering Hidden Losses

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By Trey Thoelcke Published

bank vault

The Financial Times reports that former staff members from Deutsche Bank A.G. (NYSE: DB) say the company hid $12 billion in financial losses during the credit crisis to avoid a bailout. The idea that this amount could be hidden from accountants and the hundreds of senior managers at the largest bank in Europe seems impossible because the sum is so staggering. Perhaps the people making the accusations made them up. According to the FT article:

The three complaints, made to regulators including the US Securities and Exchange Commission, claim that Deutsche misvalued a giant position in derivatives structures known as leveraged super senior trades, according to people familiar with the complaints.

All three allege that if Deutsche had accounted properly for its positions — worth $130 billion on a notional level — its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bailout to survive.

On the small chance this is true, some major audit firms are in trouble.

Douglas A. McIntyre

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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