UPDATE 2-Four Deutsche Bank employees jailed on Thursday
* Investigation into tax evasion linked to CO2 trading
* Five employees were arrested on Wednesday
* One employee released on health grounds
* Co-CEO says shaken by allegations, sees no reason to quit
FRANKFURT, Dec 13 (Reuters) - Four of the five Deutsche Bank employees arrested for money laundering or obstruction of justice related to a carbon trading scheme will remain in jail, the Frankfurt prosecutor said on Thursday.
One Deutsche Bank employee was allowed home on health grounds, the prosecutor said.
The employees were arrested during raids on Germany's flagship lender on Wednesday.
It is too early to conclude whether the raids, by 500 tax inspectors, police and prosecutors, would yield any new evidence, Frankfurt prosecutor Guenter Wittig said, adding, "This will take months. I cannot comment about an ongoing investigation."
The prosecutor's probe is focused on tax evasion linked to tax credits and a scheme involving the trading of carbon permits. As a result of the scheme, Deutsche Bank's 2009 tax return needed to be adjusted.
Deutsche Bank has said it voluntarily corrected its 2009 tax return, but noted that authorities disagreed over whether this had been done in a timely fashion. It declined to comment further on Thursday.
On Wednesday, prosecutors said they were investigating 25 bank staff on suspicion of severe tax evasion, money laundering and obstruction of justice, and searched the bank's headquarters and other premises in Berlin and Duesseldorf.
The investigations included probing the role of Deutsche Bank co-chief executive Juergen Fitschen and Chief Financial Officer Stefan Krause.
In a interview to be published in German tabloid Bild on Friday, Fitschen said he was "shaken" by the allegations but that he saw no reason to step down.
"I am convinced the allegations will be shown to be unfounded," he was quoted as saying in an advance version of the article.
He added however, that Deutsche Bank had made errors in its drive to be more successful internationally.
"In some instances we lost the correct perspective. We are determined to fix the errors of the past," he said, adding that the bank had already tried to change its culture, such as by setting up a body to review pay structures, and that more such steps would come.
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