Taxpayers Angry about IKB Bailout

In my post yesterday I asked whether anyone would ask why the German taxpayers should be left holding the bag for the disasterous decisions by the management if IKB Deutsche Industriebank to chase after the easy money on Wall Street rather than performing the hard work of financing the long-term growth of German Mittelstand enterprises. The answer is, YES! The German Taxpayers Union (Bund der Steuerzahler) is furious that the government-owned development bank KfW is providing up to Euro 8 billion (!) in guarantees to IKB.  Der Tagespiegel has a report today:

Der Bund der Steuerzahler hat das Engagement der staatlichen KfW Bank bei der Mittelstandsbank IKB kritisiert, die auf dem US-Hypothekenmarkt in Schwierigkeiten geraten ist: "US-Immobilienkredite zu finanzieren, ist keine Staatsaufgabe. Privatbanken Geschäftsrisiken abzunehmen auch nicht", sagte Matthias Warneke, Abteilungsleiter Haushalts- und Finanzpolitik beim Bund der Steuerzahler, dem Tagesspiegel. Allein schon deshalb hätte die KfW ihre IKB-Beteiligung längst senken sollen. Statt dessen weite die KfW ihren IKB-Einfluss jetzt sogar noch aus. "Das ist ordnungspolitisch verfehlt", sagte Warneke. "Schließlich sind es die Steuerzahler, die im Notfall für die KfW ungefragt haften."  (trans. The Union of German Taxpayers has citicized the support by the government-owned KfW Bank of the Miteelstand-bank IKB, which has run into problems in the US mortgage market. "It is not the function of the German government to to finance US real estate loans, nor should it cover the risks of a commercial bank" said Matthias Warneke, manager for fiscal policies at the Union.  KfW should have reduced its stake in IKB a long time ago, instead, it is now increasing its influence in the bank. "That is a terrible policy" said Warneke. "In the end it is the German taxpayer who is forced to foot the bill for KfW." )

Also worth reading is this article in Der Spiegel, which provides some interesting background on the IKB affair. Evidently the crisis was precipated when one of the big German banks cut its credil line to IKB, which was then threatened with insolvency.  Now the Taxpayer Union should investigate why that unnamed bank refused to honor its credit commitment to IKB, instead sticking the taxpayers with cleaning up the mess.

IKB wanted to play in the "big leagues" with the big US hedgefunds. It failed miserably, but won't have to face any consequences - thanks to the (forced) generosity of German taxpayers.

Comments

[erphschwester]

immer wieder gerne!
wie stets wurden wir ja auch nicht gefragt ...

[David]

so grosszuegig seid ihr!

Vielleicht gruende ich eine Bank in Deutschland - da kann ja nichts schief gehen!

[erphschwester]

mach das! dann kriegt mein steuergeld wenigstens ein gesicht. ;)