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Deutsche Bank Lost $1.6 Bln On A Bond Bet: WSJ

German banking giant Deutsche Bank AG (DB) has lost $1.6 billion over nearly a decade on a complex municipal-bond investment that it bought before the 2008 financial crisis, the Wall Street Journal reported.

The bank failed to confront head-on even as markets were upended and regulations tightened, the report said.

In 2007, Deutsche Bank bought about $7.8 billion portfolio of 500 municipal bonds, which were insured by specialized monoline insurers to protect the bank against defaults by the issuers. In March of 2008, the bank bought additional default protection from Berkshire Hathaway for $140 million.

Deutsche Bank offloaded the bonds in 2016, incurring $1.6 billion in losses. The transaction was unwound in 2016 as part of the closure of its Non-Core Operations unit.

The loss reportedly represents one of Deutsche Bank's largest ever from a single wager, roughly quadruple its entire 2018 profit.

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