A German Bank Accidentally Transferred $5.4 Billion to Four Other Banks

• A German Bank Accidentally Transferred $5.4 Billion to Four Other Banks

Germany’s state-owned development bank KfW, which gained publicity for erroneously transferring hundreds of millions of euros to Lehman Brothers Holdings Inc. the day the U.S. firm filed for bankruptcy, has done it again.

KfW in February mistakenly transferred more than 5 billion euros ($5.4 billion) to four banks because of a technical glitch that repeated single payments multiple times, according to people familiar with the matter who asked not to be identified because the matter is private. KfW said it discovered the glitch and received the money back without suffering a loss.

“KfW has detected the system’s incorrect behavior very early in the process, immediately mitigated the unwanted action and started the necessary process of analyzing the causes,” the bank said in an emailed statement. “The mistake was rapidly identified and eliminated, and the amounts overpaid were successfully demanded back. We regret that during works on the systems, this incident could happen due to human error owing to a configuration mistake.”

The incident serves as a reminder of an ill-timed payment of more than 300 million euros KfW made to Lehman Brothers in September 2008, just as the U.S. investment bank filed for bankruptcy. At the time, the German lender failed to refresh its counterparty check that would have prevented it from processing the regular transaction. The transfer turned into a political scandal in Germany, with newspaper Bild calling KfW “Germany’s dumbest bank.”

KfW, which on its website says it’s been awarded the title of the world’s safest bank by magazine Global Finance, isn’t the only lender to suffer a glitch. Deutsche Bank AG’s foreign exchange unit in June 2015 mistakenly sent $6 billion to a hedge fund client and recovered the sum a day later, a person familiar with the matter said at the time.

“KfW has immediately started comprehensive internal and external audits, in order to clarify the causes of the incident in detail and to draw the corresponding conclusions,“ the bank said.