A suspicious envelope sent to Deutsche Bank Chief Executive Josef Ackermann - the face of capitalism in Germany - was a functioning letter bomb, investigators said on Thursday.

No one has so far claimed responsibility for the package, which was intercepted late on Wednesday.

It raised fears that a wave of protests against the failures and excesses of bankers could turn more violent, and prompted police across Europe to warn banks to be extra vigilant.

Ackermann, 63, a Swiss who is the first non-German to head Germany's biggest bank, is one of the few senior managers in the country always surrounded by bodyguards.

Initial investigations show that this was an operational letter bomb, the Criminal Investigations Office for the state of Hesse and Frankfurt prosecutors in a statement.

Frankfurt's offshoot of the Occupy protest movement, which is critical of banks and has been staging protests in New York, Washington, London and many other cities, said it had nothing to do with the attempted attack.

We condemn any action that is linked to violence, said Frank Stegmaier, an activist in the Occupy Frankfurt group, which has been camping outside the European Central Bank in the German financial capital since mid-October.

Occupy has other ways of protesting, he added.

ANTI-CAPITALIST SENTIMENT

Security has been stepped up at Deutsche Bank offices around the world, banking sources said. One insider said the number of threats against Ackermann had increased in recent months and his security would be increased, although there were no plans to cancel public appearances.

Two Greek commercial banks said they had already been operating under top security conditions after similar letter bomb incidents last year.

One banking source said that since 2006 every item of mail sent to members of Deutsche Bank's executive committee was put through a security check.

We are deeply affected by the violent assault on our CEO Josef Ackermann, a spokesman for Deutsche Bank said. Employees heading to work, however, said they did not feel threatened.

There are always people who think a solution would be to make someone pay, but as an employee, I do not feel threatened, Stefan Popp told Reuters Television.

European leaders were to meet in Brussels on Thursday and Friday to try to agree on a way out of a sovereign debt crisis that has triggered a wave of government austerity measures and caused Germans to fret they may have to foot the bill.

Some experts said the euro zone debt crisis could have triggered the attempted attack.

It seems likely the incident is linked to the groundswell of public anger toward the banking sector, as highlighted by a number of anti-capitalist protests around the world, said Louise Taggart, Europe and Eurasia analyst at AKE Group.

A likely explanation is that the letter bomb was sent from Greece, which is facing a particularly difficult economic situation following the implementation of severe austerity measures, she said.

A letter bomb sent to Chancellor Angela Merkel last year originated in Greece and is thought to have been linked to an anarchist group in reaction to the extreme austerity measures.

NO MORE BOMBS?

The police said they were unaware of any further letter bombs having being sent.

We have no indications that other countries are affected. There is no sign that there are other letter bombs, Udo Buehler, spokesman for the Criminal Investigations Office for the state of Hesse, told Reuters Television.

Another security expert said he believed the attack came from the anti-capitalist movement in Germany which has been gaining momentum, as seen by a number arson attacks on the Berlin rail network earlier this year.

I don't think a sustained campaign against business or even banking leaders is likely in Germany. Ackermann is a highly symbolic target, who has personal security wherever he goes, said David Lea, a senior analyst for Europe at Control Risks.

Ackermann is the highest-paid chief executive of a German blue-chip company, earning 9 million euros (8 million pounds) in 2010. He is chairman of the Institute of International Finance, the bank lobbying group negotiating a private-sector contribution toward a multi-billion euro bailout of Greece.

Due to retire as chief executive in May after more than 10 years at the head of Deutsche, he is credited with transforming the bank into a global champion, and has become associated with Wall Street-style bonuses and a shareholder-driven management style.

Last month, Ackermann was whistled and shouted at by Occupy Movement members during a speech in the city of Hamburg.

A previous Deutsche Bank head, Alfred Herrhausen, was murdered in 1989 by leftist Red Army Faction guerrillas who blew up his car.

(Additional reporting by Sabine Wollrab, Ed Taylor, Philipp Halstrick, Reuters TV and Harry Papachristou in Athens, William Maclean in London; Writing by Madeline Chambers in Berlin, Editing by Rosalind Russell)