Berlin drafts financial crisis bank tax

The German government said Wednesday it has adopted a disputed draft tax on bank profits intended to act as a buffer against the cost of future banking failures.

Berlin drafts financial crisis bank tax
Photo: DPA

German banks would have to set aside part of their profits to feed a fund that would deal with the potential collapse of a financial institution deemed to be of strategic importance.

The proposed legislation is expected to be approved by lawmakers by the end of the year and would tax banks based on their size and level of risk taken by their managers.

Germany is the first country to move towards implementing such a bank tax, and was pushed to act after bailing out the property-lender Hypo Real Estate at a cost of more than €100 billion ($127 billion) in guarantees.

Berlin wants other countries to follow its lead so German banks are not put at a disadvantage to foreign competitors, but to date only France has expressed enthusiasm for a similar tax.

No precise figures have been floated regarding potential revenues, though the government has said they would have amounted to €1.3 billion in 2006, before the financial crisis struck.

The bill would also allow authorities to step in faster and more forcibly if a systemically important bank shows sign of weakness.

The government could for example sell off bank assets before helping to restructure remaining operations with cash from the fund.

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Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.