Officials in Frankfurt, Germany’s financial capital, have launched an investigation into tax avoidance trades enabled by the country’s second-largest bank.
German prosecutors have expanded an ongoing investigation of international tax-avoidance deals to cover questionable trades exposed last week by ProPublica and other media partners.
Handelsblatt, which collaborated on the report along with German public broadcaster ARD, reported that Commerzbank is the target of the new inquiry for its involvement in the trades, which cost German taxpayers $1 billion a year in forgone revenues.
The Frankfurt general prosecutor’s office confirmed that it had opened a new investigation but declined to name the target. A Bloomberg report also named Commerzbank as the target.
Commerzbank declined to comment. In an interview with Germany’s Bild newspaper, however, board member Michael Reuther said on Wednesday the trades were “no longer socially accepted” and that the bank will exit the business in Germany and elsewhere ahead of a government move to extinguish them.