“The supervisory council has decided to suspend two board members from responsibilities, and the council has also suspended a department supervisor from duty,” German Economy Minister Michael Glos said. “The conditions that led to this will be investigated by an auditing firm.”
KfW’s supervisory council announced the measures on Thursday night just shortly after it became known the sum was bigger than first thought. According to the bank, €350 million was transferred to the US investment bank on the same day it was filing for bankruptcy earlier this week. Initial reports placed the sum at €300 million, but the total financial damage could run as high as €536 million.
Germany’s mass-circulation Bild on Friday promptly named KfW’s management “Germany’s dumbest bankers” for the expensive cock-up.
Finance Minister Peer Steinbrück was only slightly more diplomatic, speaking of a “failure of risk management” at the state investment bank.