Associated German Lender Deutsche Bank lost $ 1.6 billion on a single bond deal involving Warren Buffett's Berkshire Hathaway insurance, according to The Wall Street Journal.
The bank bought a $ 7.8 billion portfolio of municipal bonds in 2007, according to the report. Deutsche Bank purchased standard protection on the bonds from Berkshire the following year and paid $ 140 million in the transaction.
During the decade following the acquisition, Deutsche Bank's managers delayed the recognition of losses on trade, constituted an internal debate among managers and the bank's accountant, the newspaper said. The trade had become an albatross for the company, which eventually chose to sell the bonds with losses and retire its Berkshire insurance, and recognized the $ 1