Sunday, 26 April 2009


SPIEGEL ONLINE: original article

A chance to compare future debt levels: UK/Germany

The above “secret” article on a secret paper is only in German; you will immediately understand why I could not find it in any other language… so far:

BaFin is a federal institution governed by public law. It has legal personality (a legal entity) and operates within the portfolio of the Federal Ministry of Finance(Germany) (Bundesministerium der Finanzen - BMF.

Bad Bank? Here is the chance to understand how bad such a "Bad (German) Bank" will have to be causing debt levels unheard of: mysteriously a list has made its way into the (German) public domain, a list that BaFin put together on 17 German banks and their exposure to toxic papers. The list differs between toxic papers and currently “non marketable” papers giving a combined total of € 816bn. From an accounting point of view what is the difference? May be a “higher Memo Value”?

Die 816-Milliarden-Summe setzt sich nach SPIEGEL-Informationen so zusammen:

* Landesbanken: 355 Milliarden Euro Davon 180 Milliarden toxische Papiere, 175 Milliarden Euro derzeit nicht handelbare Papiere. Allein für die HSH Nordbank setzt die Bafin rund 100 Milliarden Euro an - etwa 13 Milliarden Euro davon sollen Giftpapiere sein. Nach Informationen der "SZ" sind bei der Landesbank Baden-Württemberg 92 Milliarden in der Bilanz, bei der Westdeutschen Landesbank 84 Milliarden.

* Hypo Real Estate: 268 Milliarden Euro

* Volks- und Raiffeisenbanken: 54 Milliarden 25 Milliarden davon toxische Papiere und 29 Milliarden derzeit nicht handelbare Papiere

* Privatbanken - wie Commerzbank und Deutsche Bank: 139 Milliarden Euro
Davon werden 53 Milliarden als toxisch angesehen, 86 Milliarden als nicht handelbare Papiere. Die Deutsche Bank hat allerdings so gut wie keine Giftpapiere.

[German Milliarden = British billion]

The majority of the banks mentioned are in public hands anyway (Landesbanken + HRE = €623bn). BaFin on Friday night tried to limit the damage by arguing the list would “not only include toxic papers” but also “questionable assets”; by “no means” this list would allow for “any conclusions” on the risk or creditworthiness of the listed German banks; “this list” had “not meant to become public”; therefore the Munich office of investigation was called in to go: find the leak!

The equity capital of all German banks sums up to approx. €330bn; put the above figure in and the result will make the term “the banks are factually insolvent” this century’s understatement.

Has anybody spotted the equivalent UK, US or, better still, the combined EURO-countries’ list so far?

Carpe diem!


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