Deutsche Bank freezes property fund

Deutsche Bank, the biggest German bank, found itself under fire after its real estate division DB Real Estate took the unprecedented step of freezing one of its so-called open-ended property funds. Lawyers said that investors may be able to sue the bank for damages for the unusual step, which is only allowed in grave circumstances. And even the financial sector watchdog BaFin questioned the need for such a move. The affair sent Deutsche Bank's shares into a tail spin on the Frankfurt stock exchange.

DB Real Estate had announced on Tuesday that it was temporarily freezing its six-billion-euro (7.2-billion-dollar) Grundbesitz-Invest fund to prevent a run on withdrawals in the face of a threat of asset writedowns in its underlying property holdings. The doors of the fund would remain closed until the beginning of February by which time a revaluation of the assets would have been completed, DB Real Estate said.

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