A court case is currently underway in Milan which blows the lid off derivatives trading
And it's alleged the whopping transaction was processed during the 2008 market crash in a bid to keep investors in the dark.
Paschi is about to be taken over by the Italian government in the biggest bank bail out since the 1930s.
According to a shocking new report, Deutsche Bank feared there would be a run on its Italian client should news of the substantial one trade loss get out.
So senior officials cooked up a scheme that would allow them to trade the losses for income and spread the real deficit over a period to prevent intervention from the state, it has been claimed.
CEO John Cryan has been plagued with scandal since he took over
You can book a [profit] in front and spread losses over time?
Jeremy Bailey, Deutsche’s European chairman of global banking
Italian courts are currently probing the antics of what happened at the bank in a trial which is expected to run throughout 2017.
Prosecutors indicted 13 former and current managers from the three banks over the case focussing on the trading of complex derivatives trades which were apparently used to conceal losses.
Insiders say bankers at Deutsche and Banca Monte dei Paschi di Siena were afraid recording the substantial loss would tip the world's oldest bank into oblivion.
Banca Monte dei Paschi di Siena is prepping for bail out
Banca Monte dei Paschi di Siena, which has been operating since 1472, was required by Italian law to report the loss on the year end balance report, it has been revealed.
Now it is being alleged and not denied that senior members of Deutsche Bank's management team dreamed up a smoke and mirrors strategy to cover up the disaster.
The controversial "sleight of hand" apparent financial wizardry was welcomed by senior figures, they say.
But more mysteriously at least three staff members involved in the cover up were later found dead of apparent suicides.
The Bloomberg investigation claims Deutsche Bank's then 40-year-old head of their global rates unit, Italian banker named Michele Faissola, dreamed up the "audacious" scheme.
While Jeremy Bailey, Deutsche’s European chairman of global banking, is alleged to have said: “This is fantastic.
“You can book a [profit] in front and spread losses over time?
“We should do it for Deutsche Bank.”
More is expected to come out as the court sitting in Milan continues its evidence gathering.
This month Deutsche agreed to pay £5.7billion to resolve a US probe into its subprime mortgage business which was partially responsible for the 2008 crash.
So far Deutsche has paid more than £7bn in fines and settlements related to claims of tax evasion; violating sanctions, rigging the $300 trillion Libor market and other law breaches.
Money saving hacks
Tue, August 16, 2016
Make money from your bank account and improve your finances with these easy money saving hacks.
1 of 10
Savings – Regularly transferring a small amount into your savings account will soon add up and you'll hardly notice that it has gone
Last week a leak from the bank indicated that employees in New York and London would not get their bonuses this year.
In June last year the New York post reported that a spate of deaths among bankers involved in the derivatives trade were more sinister than suicide.
Three bankers in New York, London and Siena, Italy, died within 17 months of each other in 2013/14.All of the suicide victims were connected to the burgeoning global banking scandal, leaving more questions than answers as to the circumstances surrounding their deaths.