October 23, 2008
Germany’s banks haven’t been spared in this financial crisis and surely the German government has stepped up to provide a safety net of roughly €500bn ($640bn). Naturally, German politicians can’t resist the urge to call for nationalization of the bank sector, either.
What strikes me as most peculiar in all this is the fact that the banks that are in most trouble and have requested help from the Government’s safety plan were in fact state-controlled:
- SachsenLB (state-controlled bank of Saxony) and LBBW (state-controlled bank of Baden-Württemberg) which have had an ongoing crisis since last year
- KfW which happened to wire $500m to Lehman Brothers on the day the crisis came down on us (whoopsie!)
- BayernLB, state-controlled bank of Bavaria, which was the first German bank to take the Government up on their offer to save the day.
- … and the list could go on
I’m not denying something has to be done in the banking system to prevent things like this again. I have no clue what it is, I’m not an expert. But it seems to me that putting things under government control isn’t exactly a “Get Out of Jail Free” card. Heck, the banks that are doing the worst in this crisis and have been for the past year or so are state-controlled banks. It doesn’t take a slide rule to figure this out.
It just makes you wonder how ironic it is that Deutsche Bank’s CEO Josef Akkermann so far has refused to take money from the government’s safety plan for his bank. May he be the a**hole that the media are trying to make him look or not, in times like these, numbers seem to tell me I should put my money on him… a banker.