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'Ethical' bank frozen for ballooning debt

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'Ethical' bank frozen for ballooning debt
Francois Jozic. Photo: Noa Bank
10:00 CEST+02:00
An alternative German bank whose stated mission was to give customers democratic control over how their deposits were used was shut down late on Wednesday because of its runaway debt.

The Federal Financial Supervisory Authority (BaFin) placed a “moratorium” on Noa Bank, a Düsseldorf-based bank with 15,000 customers, declaring that the bank faced insolvency and must not accept payments that were not strictly related to discharging its debts.

Noa Bank had assets of about €179 million and debts of about €172 million. The moratorium was necessary “to secure the remaining assets” of the bank, BaFin said.

But founder Francois Jozic said in a blog on the bank's website that BaFin had ignored his efforts to generate more capital, according to news magazine Der Spiegel.

Jozic founded Noa Bank in November 2009 to give clients a say in where their money was being used to enforce "financial democracy."

“BaFin was presented until today with many suggestions for potential investors, but none seemed to satisfy them,'' he wrote.“The entire financial system is self-organized in order to be inflexible. I have tried to change it but I have failed.”

Jozic also blamed BaFin for the failure, saying that the announcement that they were placing the moratorium on the bank had “scared off various investors.”

Jozic compared himself in his blog to Joseph K., the bewildered hero of German-language author Franz Kafka's novel “The Trial,” which opens with the line: “Someone must have been telling lies about Joseph K.. For without having done anything wrong, he was arrested one morning.”

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