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Why are they throwing money away?
By Aaron Kirchfeld and Brian Parkin
Sept. 17 (Bloomberg) -- KfW Group, Germany's state-owned development bank, faces ``consequences'' after transferring 300 million euros ($425 million) to Lehman Brothers Holdings Inc. the same day the U.S. securities firm filed for bankruptcy, the government said.
``There may indeed be consequences, and above all we must prevent this from happening again,'' Stefan Olbermann, a spokesman for Germany's Finance Ministry, said today in an interview from Berlin. The Frankfurt-based bank may lose money after it made an ``automated payment'' to Lehman for currency swaps on Sept. 15 that couldn't be halted after previous approval, KfW spokesman Michael Helbig said.
The Lehman transaction comes after politicians criticized the development bank for selling IKB Deutsche Industriebank AG, the first German casualty of the subprime mortgage market collapse, to Lone Star Funds for less than 20 percent of the price the government initially sought. KfW, which led a 10 billion-euro bailout of Dusseldorf-based IKB, may report a full- year loss because of exposure to Lehman and the sale of IKB, Standard & Poor's Ratings Services said today.
``We want to get to the bottom of this quickly and find out how this could have happened,'' Olbermann said. ``This won't push KfW into an existential crisis, but 300 million euros are clearly not peanuts.''
http://www.bloomberg.com/apps/news?p...&refer=germany
Sept. 17 (Bloomberg) -- KfW Group, Germany's state-owned development bank, faces ``consequences'' after transferring 300 million euros ($425 million) to Lehman Brothers Holdings Inc. the same day the U.S. securities firm filed for bankruptcy, the government said.
``There may indeed be consequences, and above all we must prevent this from happening again,'' Stefan Olbermann, a spokesman for Germany's Finance Ministry, said today in an interview from Berlin. The Frankfurt-based bank may lose money after it made an ``automated payment'' to Lehman for currency swaps on Sept. 15 that couldn't be halted after previous approval, KfW spokesman Michael Helbig said.
The Lehman transaction comes after politicians criticized the development bank for selling IKB Deutsche Industriebank AG, the first German casualty of the subprime mortgage market collapse, to Lone Star Funds for less than 20 percent of the price the government initially sought. KfW, which led a 10 billion-euro bailout of Dusseldorf-based IKB, may report a full- year loss because of exposure to Lehman and the sale of IKB, Standard & Poor's Ratings Services said today.
``We want to get to the bottom of this quickly and find out how this could have happened,'' Olbermann said. ``This won't push KfW into an existential crisis, but 300 million euros are clearly not peanuts.''
http://www.bloomberg.com/apps/news?p...&refer=germany