KfW transfer to Lehman reportedly no mistake
The €350-million transfer to Lehman Brothers from German state development bank KfW transfer was not a mistake, according to the Monday edition of daily Frankfurter Allgemeine Zeitung.
The money was wired to the troubled US investment bank last Monday just as Lehman Brothers was filing for bankruptcy. KfW officials claimed at the time that the transfer had been a mistake, but the paper reported the German bankers consciously chose to go through with the planned swap transaction.
According to the paper, KfW had determined prior to the transfer that “Lehman doesn’t look so good” in an internal analysis. But the bankers decided to proceed with the now infamous transfer. Although KfW officials saw Lehman’s impending doom the weekend before it filed for bankruptcy, they apparently decided there was no compelling reason to try and halt the €350-million transfer.
KfW is now only likely to get just half of the money back via insolvency proceedings at Lehman.
Three bank officials called "Germany's dumbest bankers" have since been suspended for the expensive cock-up.
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The money was wired to the troubled US investment bank last Monday just as Lehman Brothers was filing for bankruptcy. KfW officials claimed at the time that the transfer had been a mistake, but the paper reported the German bankers consciously chose to go through with the planned swap transaction.
According to the paper, KfW had determined prior to the transfer that “Lehman doesn’t look so good” in an internal analysis. But the bankers decided to proceed with the now infamous transfer. Although KfW officials saw Lehman’s impending doom the weekend before it filed for bankruptcy, they apparently decided there was no compelling reason to try and halt the €350-million transfer.
KfW is now only likely to get just half of the money back via insolvency proceedings at Lehman.
Three bank officials called "Germany's dumbest bankers" have since been suspended for the expensive cock-up.
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