Steinbrück looking for blood over KfW's Lehman scandal
Published: 18 Sep 2008 16:39 GMT+02:00
Updated: 18 Sep 2008 16:39 GMT+02:00
German Finance Minister Peer Steinbrück has called for KfW officials to pay the consequences for the state development bank's mistake transfer of €300 million ($427 million) to Lehman Brothers just as the US investment bank was collapsing.
“This is an outrageous event,” Steinbrück said on Thursday at a meeting with KfW leaders in Berlin. “There will be both organizational and procedural consequences,” he said, but declined to give details.
Steinbrück is the deputy chairman of the advisory board for the state development bank, where officials frantically tried to stop the erroneous transaction only to find they were unable to get their money back. Now KfW can only expect half of the cash – much of which was taxpayer money – returned via insolvency proceedings at Lehman Brothers.
This is not the first time KfW has been embroiled in the financial crisis sparked by the subprime lending mess in the United States. Earlier this year, KfW was forced to bailout the German industrial bank IKB to the tune of several billion euros.