German KfW bank boss resigns amid subprime mess

The head of German state development bank KfW, Ingrid Matthäus-Maier, has resigned amid the subprime mess at its affiliated business lender IKB.

Matthäus-Maier resigned “for health reasons” but would remain on the board until September when she turns 63, according to a statement issued by the bank on Monday.

“Turbulence regarding the IKB rescue plan and persistent speculation about me in the past months have made it impossible for me to devote all my strength to my work,” she said.

Her contract was originally to run until June 2009.

KfW currently owns roughly 43 percent of IKB, a specialist in loans to small- and medium-sized business that almost went bankrupt after investing heavily in securities backed in part by high-risk US mortgages. It has since received a series of bailouts lifelines worth several billion euros, with KfW footing most of the bill.

IKB expects to post a loss of around €800 million for its year to March 2008. Following a capital increase at IKB, KfW’s holding will rise to around 90 percent later this year and while the development bank has been looking to sell its stake, few prospective buyers have come forward.

Among them are the regional savings banks WestLB and BayernLB, both of which were also caught up in the financial turmoil and have received state-backed guarantees worth billions of euros.

Matthäus-Maier is one of the highest-ranking women in the German corporate world but some had said her training as a jurist did not qualify her to run one of the country’s leading banks.

A former member of the liberal Free Democratic Party (FDP) and the youngest member of parliament in 1976, she switched to the centre-left Social Democrats in 1982. She joined the KfW board in July 1999 and was named its head in October 2006.

Members of the conservative German Christian Democratic Union (CDU) party and others in the FDP have slammed her management of KfW. The German development bank has named board member Wolfgang Kroh as its interim head.

KfW also said on Monday it would post a loss of €6.4 billion ($10 billion) for 2007 owing to rescue packages for IKB. The German government’s financial arm had made a profit of €1.5 billion in 2006 and was publishing results calculated for the first time according to IFRS or international accounting standards.

KfW had to provide guarantees for the Rhineland Funding conduit through which IKB had invested in the US securities and also had to write down the value of its investment in IKB. The total cost of the debacle has come to €7.2 billion, including €400 million for the asset writedown and €6.8 billion for the backing provided to IKB.

Without the exceptional charges, KfW, which has a mandate to back small enterprises and investments in developing countries, would have posted a profit of close to €1 billion.

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Bar closures and no Christmas markets: How Bavaria is tightening Covid rules

Bavaria will order the closure of all bars and clubs as part of sweeping new restrictions to try and control the Covid spread and ease overrun hospitals. Here's a look at what's planned.

Closed Christmas market stalls in Munich.
Closed Christmas market stalls in Munich. Photo: picture alliance/dpa | Sven Hoppe

On Friday Bavarian state leader Markus Söder announced more tough restrictions to deal with spiralling Covid infections and packed intensive care units.

“The corona drama continues,” said Söder after the cabinet meeting, adding that 90 percent of Covid patients in state hospitals are unvaccinated. “Being unvaccinated is a real risk.”

Bavaria has a vaccination rate of 65.9 percent – lower than the nationwide rate of almost 68 percent.

READ ALSO: Bavaria cancels all Christmas markets in Covid surge

Söder said the state’s Covid package was about “blocking, braking and boosting”, adding that vaccination centres will be ramped up. 

“We must act,” he said. “Bavaria is exhausting almost all legal means until December 15th.”

Earlier this week, Bavaria introduced a state-wide 2G rule, meaning only vaccinated people (geimpft) and people who’ve recovered from Covid (genesen) can enter many public spaces. People who are eligible to get vaccinated but choose not to get it are excluded. 

Here’s an overview of the planned restrictions set to come in on Wednesday, as reported by local broadcaster BR24. 

Bars, clubs and restaurant curfew

From Wednesday, and for three weeks, all nightlife like clubs, discos, bars, pubs and brothels in Bavaria are set to close their doors. Restaurants will have to shut at 10pm. So planned Christmas nights out will likely need to be cancelled or postponed. 

Christmas markets

There will be no Christmas or Christkindl markets in Bavaria this year. In the past days, several cities had announced that they would not be holding these events this year due to the Covid situation. 

Contact restrictions on the unvaccinated

Söder announced new restrictions on the number of people those who are not inoculated can socialise with. A maximum of five unvaccinated people will be allowed to meet, from two different households. Children under 12 will not be included in the total, as well as vaccinated or people who’ve recovered from Covid.

Cultural and sporting events

All cultural and sporting events can only take place with significantly reduced spectators. At theatres, opera performances, sporting events, in leisure centres and at trade fairs, there will be a 25-percent capacity limit. The 2G plus rule also applies. This means that only vaccinated and recovered people are allowed to enter (not the unvaccinated) – and only with a negative rapid test. Masks are compulsory everywhere.

Universities, driving schools, close-body services: 2G plus

All universities, driving schools, adult education centres and music schools will only be open to those who have been vaccinated and have recovered – making it 2G. This rule also applies to body-related services, like hairdressers and beauty salons. Only medical, therapeutic and nursing services are exempt from the 2G rule. So unvaccinated people can still go to the doctor or receive a medical procedure. 

KEY POINTS: Germany finalises new Covid restrictions for winter


Shops remain exempt from 2G rules, meaning unvaccinated people can visit them. However, there is to be limits on capacity. This means that fewer customers are allowed into a shop at the same time.

Special rules for hotspots

Currently, the incidence in eight Bavarian districts is above 1,000 infections per 100,000 people in seven days. Here and in all other regions where the incidence goes above this number, public life is to be shut down as far as possible.

This means that restaurants, hotels and all sports and cultural venues will have to close. Hairdressers and other body-related service providers will also not be allowed to open for three weeks, and events will also have to be cancelled. Universities will only be allowed to offer digital teaching. Shops will remain open, but there must be 20 square metres of space per customer. This means that only half as many customers as in other regions are allowed in a shop.

If the incidence falls below 1,000 for at least five days, the rules are lifted.

Schools and daycare

Throughout Bavaria, schools and daycare centres are to remain open. However, there will be regular Covid testing. Children and young people have to continue to wear a face mask during lessons, including school sports, unless they are exercising outside. 

Bavaria is expected to approve the measures on Tuesday and they will be in force until at least December 15th. We’ll keep you updated if there are any changes.