An article published on Thursday in the Financial Times cited claims that the Deutsche Bank, a major global banking and financial services company, failed to recognise $12bn in losses during the financial crisis, thereby helping the institution avoid a government bailout. The newspaper reported that three former bank employees made these allegations in complaints to US regulators, but has been unable to verify these statements.
If accurate, these revelations will cast a dark shadow over the bank’s previously largely unblemished reputation. The Deutsche Bank has repeatedly been praised within and outside Germany for avoiding the kind of government intervention experienced by numerous other banks in the euro zone. Although its credit risks in Italy and Spain are high, the bank is believed to have only a negligible exposure to Greece. DB did report an annual loss in 2008, but not once since then, and only a few months ago was named Best Global Investment Bank in the annual Euromoney Awards for Excellence, largely owing to its handling of the crisis.
The FT information prompted an immediate reaction from news media and blogs here in Germany. The Süddeutsche Zeitung in particular brought into question the legacy of former bank director Josef Ackermann, whose rejection of government aid did presumably contribute to the speed of DB’s recovery in 2009, but might also have deliberately misled shareholders and financial observers.