Embattled German lender Deutsche Bank lost $1.6 billion on a single bond trade that involved insurance from Warren Buffett's Berkshire Hathaway, according to The Wall Street Journal. The bank bought a $7.8 billion portfolio of municipal bonds in 2007, according to the report . Deutsche Bank bought default protection on the bonds from Berkshire the following year, paying $140 million in the transaction. In the decade after its purchase, Deutsche Bank managers delayed the recognition of losses on the trade, sparking an internal debate among executives and the bank's auditor, the newspaper reported. The trade had become an albatross for the firm, which ultimately chose to sell the bonds at a loss and retire its Berkshire insurance, recognizing the $1.6 billion loss in 2016.

The bank's executives debated up until last year whether it should have restated previous earnings based on the wrong-way trade, ultimately deciding not to.

"This transaction was unwound in 2016 as part of the closure of our Non-Core Operations" unit, a bank spokesman told the Journal. "External lawyers and auditors reviewed the transaction and confirmed it was in line with accounting standards and practices."

Read the WSJ story here.