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A German newspaper, Bild, labeled KfW the country's dumbest bank after learning of the $504 million transfer made two hours before Lehman Brothers declared it was seeking Chapter 11 bankruptcy protection, The Guardian reported Friday.

Two board members and the bank's head of risk control were suspended and KfW Chief Executive Officer Ulrich Schroeder's job was said to be in jeopardy, the report said.

Germany's Finance Minister Peer Steinbrueck said "risk management is not intact" at the bank that is owned 80 percent by the German government and 20 percent by the country's federal states.

Steinbrueck was "enraged and embarrassed", the newspaper report said.

The automated transfer was described as a "one-way swap." It occurred while other banks were pulling their investments out of Lehman Brothers "as fast as they could", the report said.

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