In 2007, the bank bought a $7.8 billion (roughly R108.4 billion) portfolio of municipal bonds. A year later, the German lender purchased default protection from Berkshire Hathaway for the investment, paying $140 million (R1.9 billion) up front for the transaction.
Internally, Deutsche Bank's executives had debated over the valuation of the bonds after the purchase, the report said. Financial auditors from KPMG also questioned whether the bank has set aside sufficient funds to cover potential losses, however, the bank shrugged off those concerns, according to the report.
Deutsche Bank eventually decided to offload the bonds and related derivatives nine years after the purchase.
"This transaction was unwound in 2016 as part of the closure of our Non-Core Operations" unit, a bank spokesman told the Journal in an email. "External lawyers and auditors reviewed the transaction and confirmed it was in line with accounting standards and practices."
Executives at Deutsche Bank never decided to restate its financial statements to include the losses before an internal investigation closed last year, the report said.
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