Implode-o-Meter News - Deutsche Bank Opaque Loans From Brazil to Italy Hid Risk

Germany's largest bank managed to lend to firms from Brazil to Italy while making the transactions disappear from its balance sheet, even though it still is owed the money, according to four people with knowledge of the practice and internal documents provided to Bloomberg News.
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The loans are among 395.5 billion euros in assets that Deutsche Bank excludes from its balance sheet by offsetting them with equivalent liabilities, according to a person with direct knowledge of the practice. Deutsche Bank disclosed the amount for the first time in April under new international financial reporting standards. The total represents 19 percent of the company's reported assets of 2.03 trillion euros.
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The bank profited from arranging side trades around the loans, including selling credit-default protection on government bonds later battered by Europe's sovereign-debt crisis, according to documents describing the Monte Paschi and Banco do Brasil deals and three people with knowledge of the transactions who asked not to be identified because the loans are private.

The loan documents and other published information don't show how the lender's bets fared or whether regulators were aware of the accounting.

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Deutsche Bank Opaque Loans From Brazil to Italy Hid Risk