KfW slammed for mistakenly wiring Lehman €300 million
AFP/DPA/The Local · 17 Sep 2008, 14:48
Published: 17 Sep 2008 14:48 GMT+02:00
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"We are working to shed light very quickly on this technical fault," Finance Ministry spokesman Torsten Albig said. He called the transfer, which happened on Monday while the US investment bank was filing for bankruptcy protection, “inexplicable” as well as “astounding and annoying.” He also warned there would be consequences at the bank for the cock-up.
A KfW spokesman told the Frankfurter Allgemeine Zeitung newspaper that there had been "an erroneous swap payment on Monday ... the reasons for which are being examined internally."
According to news agency DPA, officials at KfW frantically attempted to stop the transaction once they realized what was happening, however, they were unable to get their money back. Now KfW can only expect to have half of it 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.
The state development bank was to report to its supervisory board on the sale of IKB to a US investor this Thursday, but now the hot topic is certain to be the millions burned in the Lehman Brothers debacle.