I guess everybody in the banking world around the globe has heard about the Lehman bankruptcy latest this Monday morning, everybody besides Germany’s largest government owned bank – KfW.
In an attempt to win the Darwin award for banks or by taking the name of the bank to literally (KfW – translated: Bank for Reconstruction), they transferred 300 Million Euros to already bankrupt Lehman during Monday. At the same time their government colleagues were closing the German Lehman subsidiary.
Officials were quick to describe the matter as a “mistake“, but the loss of another 300 Million comes at a time when politicians are still trying to pour oil on troubled water after KfW has just flogged its troubled subsidiary IKB to US private equity firm Lone Star at cost of at least EUR 10 Billion of taxpayer’s money.
From the KfW web site:
Providing Support through Banking Expertise
KfW Bankengruppe gives impulses for the economy, society and ecology in Germany, Europe and the world over. It supports change and promotes promising ideas.
The payment was part of a SWAP deal between Lehman and KfW and it is currently not clear if the amount was collateralized or otherwise secured. It looks like the politicians that are part of management board of the bank, particularly the German economics minister who is head of this illustrious circle, are currently desperately searching and in need of a few scapegoats to blame the repeating disasters on.
Our advise: Finally get some professionals in to do the work – or as the Americans say: Help from professionals or professional help.
But for those in charge that are, seemingly without any accountability, blowing billions of taxpayer’s money it might – in their houses of mirrors – look like as if such kind of losses have become “business-as-usual”. And these losses are just the tip of the iceberg of disasters created in the last years.
KfW Group web site
Update 19-Sep-2008 20:00 (UTC):
In the meantime officials have declared direct losses of KfW linked to the Lehman bankruptcy to be about EUR 536 million. Two directors of the bank and the head of the risk / controlling department were fired yesterday for the money transfer to Lehman on the day of bankruptcy. To top the whole thing – Lehman originally did not accept the transferred amount – it had to be sent again.
None of the management board members has so far seen any need for consequences with regards to themselves. They claim that the management board was provided with very little information to actually fulfill their oversight function.
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Certainly when you were watching the news today or read a newspaper this morning you could not avoid learning that the next “most prominent” victims of the current banking crisis were biting the dust.
I was quite interesting what kind of nonsense was pushed around in the mainstream media to calm down Mr & Ms Jones concerns about their money in the bank – one commentator / self-proclaimed expert was even thickheaded enough to say that…
If your shouting days are through – Fred Kasulzke shouts for you! That’s how German/French songwriter and singer “Reinhard Mey” was singing in the 70s about the business idea of renting people for demonstrations and riots. Seemingly these days “claqueurs” are getting popular again in Germany particularly with the bureaucrats and stakeholders in the state backed German health system…
Safaricom, Kenya’s biggest mobile phone operator, has launched a service this week that will use short message services (SMS) to transfer money even from or to customers without bank accounts. The product allows the operator’s 5.8 million subscribers to use their mobile phones to send money within Kenya where often the money earner of a family is working in a city to support family members living in rural areas. “…This service is the first of its kind in the world. We have plans to take it elsewhere…the first international link, between the U.K. and Kenya, will come in the very near future…
One event currently has, during evenings, swept almost half of Europe’s population off the streets (the other half is most likely watching it in so called public viewing zones) – the European Football championship.
Now this Monday, Swiss TV who together with Austrian TV for the two hosting nations Austria and Switzerland is transmitting the TV footage from the games, had a bit of a problem staying up to date with changes in neighboring Germany during the last 60 years. To be more precise it turned back time to the 1940s of Nazi Germany.
When the two teams at the beginning of the match between Germany and Austria were singing their National Anthems, Swiss TV used the verse for the German Anthem in its sub titles that was sung until the fall of the Third Reich.
The TV station mentioned in their apology, that it all happened by mistake. Officially the incident was blamed on two junior members of the TV team that have “copied the wrong text from the Internet“. And while these sub titles…