'Dumbest Bank' Makes Another Massive Error

KfW did get its money back though
By Elizabeth Armstrong Moore,  Newser Staff
Posted Mar 28, 2017 12:48 PM CDT
'Dumbest Bank' Makes Another Massive Error
The logo of German bank KfW in Bonn, western Germany, on Monday, Nov. 17, 2008.   (AP Photo/Roberto Pfeil)

(Newser) – To err is human, and a major bank is reminding the world of this for the second time after once again accidentally transferring a massive sum of money it shouldn't have. The blunder occurred on Feb. 20, when Frankfurt-based lender KfW, a German government-owned development bank, transferred $5.4 billion to four other banks, reports Deutsche Welle. Germany's central bank identified the mishap, which was caused by an "experienced" programmer's "configuration error" made while working on the bank's payment software, the FT reports. That contributed to the creation of an "automatic loop" in which duplicate payments were made.

While the bank says it "launched a comprehensive international and external investigation" to identify the exact error and avoid ones like it moving forward, it says all the money was returned promptly. Two side notes most media are reporting: One, that newspaper Bild called KfW "Germany's dumbest bank" in 2008 after it transferred 320 million euros to Lehman Brothers on the day the US investment bank filed for bankruptcy. Second, that the German bank doesn't stand alone. In 2015 Deutsche Bank AG wrongly sent $6 billion to a hedge fund client, though it got the money back the next day. It happened when a junior foreign-exchange trader's boss was on vacation. Read about the mishap here. (Read more bank malfunction stories.)

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