Germany: Examiners acknowledge four-billion gap : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Babelfish translation

The banking company Berlin has a capital requirement of four billion Marks in opinion of the Federal Supervisory Office for credit systems. Before it was feared that still more billions would be.

Bonn - the amount is according to the specification the result of special tests at the company as well as with two section banks. The precise height of the capital increase is determined in the next days. Senate speaker Michael Andreas Butz said, thus speculations would not durable have proven as, according to which the deficit was still higher. The available result makes the household organization not simpler, it becomes however more controllable thereby.

Before the " citizens of Berlin newspaper " had reported with reference to sets of the banking company that from company head the Wolfgang pluck on 23 May four billion Marks specified already again rubbish were. The local bank getting thing is not in a the position to equip the real estate service daughter IBAG with in January assured own capital funds of scarcely a billion Mark continues to report the newspaper. The banking company executive committee wants to therefore deliver a patronatserklaerung for the IBAG. Thus all future business of the IBAG went debited to the banking company. Industry connoisseurs feared that the value of the IBAG had to be corrected again drastically downward, write the newspaper.

Also the adjustments of value on the subsidiary companies Landesbank (LBB) and Berlin Hyp fail according to the report clearly more highly than expected. With the Landesbank the adjustment of value requirement almost exploded in the passed financial year on more than 1.2 billion Marks. The executive committee regarded at the beginning of the yearly still another amount of 360 million Marks as sufficient. With likewise a billion Mark instead of more expected scarcely 200 million Marks also the adjustment of value requirement Berlin Hyp is to be, which had been led until March by the former DCU PARTY HEAD Klaus Landowsky.

Der Spiegel

-- spider (, June 20, 2001


So, if the big bank is dead on a capital basis, when will it fall over? And, will it take German real estate lending and even the central bank with it?

Is this an example of "too big to fail" actually failing? I'm wondering about dinosaurs a little closer to home.

-- Margaret J (, June 20, 2001.

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