FRANKFURT Jan 7 German financial watchdog Bafin
has accused Deutsche Bank of misleading it over a
controversial derivatives trade with Italian peer Monte dei
Paschi di Siena and of falsely accounting for the
deal, a newspaper reported.
Monte dei Paschi (MPS) and Deutsche Bank in December reached
a deal to close the disputed derivative trade, which is at the
heart of a judicial probe into alleged fraud at Italy's third-
The 2008 deal, known as Santorini, is one of three
derivative trades that forced MPS to take a hit of 730 million
euros ($995.9 million) on its 2012 accounts.
"I think it is absolutely unacceptable that you (Deutsche
Bank) apparently misinformed ... (Bafin) and other authorities
over a long period of time and falsely accounted for the (Monte
dei Paschi) transaction," Bafin's banking regulator Frauke Menke
wrote in a letter to Deutsche Bank, according to a report by
daily Die Welt published online on Tuesday.
The reported letter would represent the latest jab in a
fight between Deutsche Bank and its regulator.
According to German media reports last weekend, Bafin has
also said in a report that Deutsche Bank Co-Chief Executives
Anshu Jain and Juergen Fitschen have made little impression so
far in their efforts to restore the bank's reputation.
According to Die Welt, Deutsche Bank had retroactively
corrected its accounting for the Monte dei Paschi trade, citing
a tardy flow of information between the bank's trading and
"Particularly, the question arises why the finance unit was
only now informed by the trading division," Bafin wrote in the
letter, dated November 2013, the newspaper said.
A Deutsche Bank spokesman said the lender is cooperating
with regulatory authorities. "Together with them, we seek to
investigate questions thoroughly and promptly."
Bafin declined to comment.
($1 = 0.7330 euros)
(Reporting by Arno Schuetze and Alexander Hübner; Editing by