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German Banks: The Rotten Heart of Europe


Volatire

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Feb 25, 2012
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13,416
Europhiles like to portray German banks as paragons of prudence, and German financial regulation as a model to be emulated. Colm McCarthy skewers this laughable nonsense:

The publicly owned Landesbanks in Germany have been a disaster area – West Deutsche Landesbank, based in Dusseldorf, has had to be wound down and several others have incurred horrendous losses and have been closed, bailed out or restructured. The German bank regulator, called Bafin, has failed dismally and the popular perception of Germany as a model of financial caution for the rest of Europe is well wide of the mark.
German banks remain over-leveraged and undercapitalised:

Deutsche Bank had €2,012.3bn in assets but just €54.4bn in shareholder equity, 2.7 per cent of assets. Put another way, Deutsche Bank had a leverage ratio of 37 times, that is, its assets were 37 times its capital...

Deutsche is Germany's largest bank and one of the largest in the world. The bank's balance sheet equals about 56 per cent of Germany's GDP. If Deutsche ever got into trouble, even the German treasury would struggle to bail it out.
The US has already bailed out European banks once:

The US taxpayer has already done a big favour for Europe when the government bailed out US financial institutions whose failure would have bankrupted large swathes of the European banking system. US regulators are understandably anxious to avoid any repetition.
The US wants US subsidiaries of European banks to come up with more capital to cover potential losses:

US regulators, who want big European banks operating in the US to put dedicated risk capital into their large US subsidiaries. The US arm of Deutsche currently has no equity at all and the US authorities are naturally concerned about this.
All of which is a far cry from the fantasies peddled by the kneejerk europhiles of p.ie ....

Europe must fix its broken banks - Independent.ie
 


Nemesiscorporation

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Joined
Oct 2, 2011
Messages
14,180
Europhiles like to portray German banks as paragons of prudence, and German financial regulation as a model to be emulated. Colm McCarthy skewers this laughable nonsense:



German banks remain over-leveraged and undercapitalised:



The US has already bailed out European banks once:



The US wants US subsidiaries of European banks to come up with more capital to cover potential losses:



All of which is a far cry from the fantasies peddled by the kneejerk europhiles of p.ie ....

Europe must fix its broken banks - Independent.ie
I see the Fianna Fail fightback to blame everyone but themselves has begun in earnest.
 

Dublin 4

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Feb 6, 2011
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12,993

Bartholomew Fair

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Apr 10, 2013
Messages
101
The German banks were at the Fed Emergency window in 2008 same as the other banks. We only found out about that because of congressional hearings on the banking crisis in the US.

The German banks weren't doing anything else other than what the American banks were doing- ie wrapping up and selling worthless debt at an inflated price to each other. As well as arranging disastrous deals via the Landesbanken to German state administrations- disastrous for the German taxpayer that is.

To those who tout the German model of governance I would say 'Hypo'.
 

YouKnowWhatIMeanLike

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Joined
Apr 13, 2011
Messages
7,225
The German banks were at the Fed Emergency window in 2008 same as the other banks. We only found out about that because of congressional hearings on the banking crisis in the US.

The German banks weren't doing anything else other than what the American banks were doing- ie wrapping up and selling worthless debt at an inflated price to each other. As well as arranging disastrous deals via the Landesbanken to German state administrations- disastrous for the German taxpayer that is.

To those who tout the German model of governance I would say 'Hypo'.


that's all you have? why does the German debt to GDP stand at only at 82% then?

move the hate thread to the zoo where it belongs.
 

Casablanca

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Jul 21, 2011
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7,562
7 posts and no Goodwins yet? Ye're slowing lads.........
 

Bartholomew Fair

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Apr 10, 2013
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Why are you so distressed by actual news? Did you yawn when Lenihan put the nation on the hook for crooked Irish banks?
 

Boy M5

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May 20, 2010
Messages
21,729
The German banks were at the Fed Emergency window in 2008 same as the other banks. We only found out about that because of congressional hearings on the banking crisis in the US.

The German banks weren't doing anything else other than what the American banks were doing- ie wrapping up and selling worthless debt at an inflated price to each other. As well as arranging disastrous deals via the Landesbanken to German state administrations- disastrous for the German taxpayer that is.

To those who tout the German model of governance I would say 'Hypo'.
Or the hapless BayernLB
 

clearmurk

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Apr 27, 2012
Messages
3,019
@YKWIML Have you read the article? Seems pretty solid to me.

Most poignant point:

The current structure of the European banking 'industry' is a principal source of the biggest economic downturn since the Second World War and the restoration of the pre-crisis banking regime the surest guarantee of another crisis down the road.
This restoration to the pre-crisis status quo is EXACTLY what our current government are about.
 

YouKnowWhatIMeanLike

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Apr 13, 2011
Messages
7,225
Why are you so distressed by actual news? Did you yawn when Lenihan put the nation on the hook for crooked Irish banks?
David McWilliams was so busy congratulating Lenihan that I didn't get the opportunity to give him a good kick in the ar$e. But he had at least the decency to step out of this world before we could get him.
 

Ulster-Lad

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Oct 26, 2006
Messages
10,092
David McWilliams was so busy congratulating Lenihan that I didn't get the opportunity to give him a good kick in the ar$e. But he had at least the decency to step out of this world before we could get him.
Idiotic post. Has anyone been gotten for the economic situation in this country yet? Or did you mean "get him" in some other way?
 

Mad as Fish

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Joined
Dec 6, 2012
Messages
24,449
Europhiles like to portray German banks as paragons of prudence, and German financial regulation as a model to be emulated. Colm McCarthy skewers this laughable nonsense:



German banks remain over-leveraged and undercapitalised:



The US has already bailed out European banks once:



The US wants US subsidiaries of European banks to come up with more capital to cover potential losses:



All of which is a far cry from the fantasies peddled by the kneejerk europhiles of p.ie ....

Europe must fix its broken banks - Independent.ie
Nothing new about German banks being fast and loose with other peoples money, see my signature. Where they did differ from the British model though was their much closer ties to industry from the mid 1800's onwards. Cartels were not only legal but encouraged by the governments of the Germanic states, it certainly helped create a very strong industrial base but, like the banking system worldwide, they got too big for theirs boots and began to imagine themselves sacred. Why anyone should think they are less a bunch of shysters than any other country's banks is beyond me.
 

YouKnowWhatIMeanLike

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Apr 13, 2011
Messages
7,225
Idiotic post. Has anyone been gotten for the economic situation in this country yet? Or did you mean "get him" in some other way?
true, I should correct my post. absolutely nobody was held accountable for the banking mess in Ireland yet. we don't even know what happened. The money might have never been there in the first place who knows or maybe Bertie has it all hidden under his mattress...
 

tipp revolution

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Feb 16, 2011
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2,603
So is the German Government running the show in Europe?
 

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