• Germany's news in English

German bank group rejects higher Greek debt write-down

The Local · 11 Oct 2011, 11:16

Published: 11 Oct 2011 11:16 GMT+02:00

However, markets already consider the debt “haircut” insufficient and speculation has grown that a considerably higher write-down is required.

Michael Kemmer, the head of the BdB banking federation, told ARD television in Germany that the 21-percent cut was already a "massive contribution" to lowering Greece's debt burden.

"It will not help to bring back confidence in the financial markets if we start talking about second and third measures before we have finished the first.”

Kemmer also rejected a blanket approach to bank recapitalisation in Europe, saying that officials should look at individual lenders on a case-by-case basis and see where additional cash injections were required.

But both German Finance Minister Wolfgang Schäuble and head of eurozone finance ministers Jean-Claude Juncker admitted that the amount agreed upon in July may not have been high enough. In an interview on Austrian television, Juncker suggested that 60-percent would have been a more realistic figure.

Regarding the effects a debt write-down would have on German banks, Kemmer remained positive: “Capital has increased in recent months and they are stable,” adding that they were in a position to manage a loss in debt repayments.

"German banks have learnt from the financial crisis of 2008. They improved their risk management and boosted their capital. Compared to other banks internationally, the German banks are doing well," said Kemmer.

The European Banking Authority is conducting an audit of banks' capital to say how much extra liquidity is needed to cover potential losses stemming from their holdings of Greek debt. Estimates from the International Monetary Fund suggest that such coverage may cost up to €200 billion ($272 billion).

Story continues below…


The Local (news@thelocal.de)

Your comments about this article

16:06 October 11, 2011 by derExDeutsche
What? No 21% discount for the 400 Tanks that Greece bought from the USA with its last bailout?

and just as the Greek Govt. is getting into the International Arms Dealing racket...
Today's headlines
Air Berlin to cut 1,200 jobs and halve airline fleet
Photo: DPA.

Struggling Air Berlin, Germany's second-largest airline, announced on Wednesday a major restructuring plan that shrinks its fleet and cuts 1,200 jobs.

Germany's 10 most Instagram-able places
Photo: Thomas Wolf/Wikimedia Commons.

From stunning chalk-white cliffs to fairy tale castles, Germany has some breathtaking sights to see, perfect for social media.

Train evacuated as passenger flips out during ticket check
Police at the scene in Leipzig. Photo: DPA

A regional train was evacuated in Leipzig on Wednesday after a passenger became aggressive during a ticket inspection.

Man arrested in Wuppertal as part of Spanish Isis raids
Police detain the suspect in Wuppertal. Photo: DPA

Police have arrested five suspected members of an Isis cell in Spain, Belgium and Germany that spread propaganda for the group online, the Spanish interior ministry said Wednesday.

Germans cut home energy usage by six percent in a year
Hamburg at night. Photo: DPA

The Energiewende is the German government's ambitious policy of drastically reducing carbon emissions. New figures show one remarkable success.

Merkel party MP under fire for using Nazi propaganda term
Bettina Kudla. Photo: Büro Bettina Kudla MdB/DPA.

A member of Angela Merkel's conservative CDU party is in hot water after tweeting over the weekend a Nazi propaganda term in her criticism of the country’s refugee policies.

Govt denies planning bailout for troubled Deutsche Bank
Photo: DPA

Germany's finance ministry on Wednesday said the government was "not preparing rescue plans" for Deutsche Bank, denying a newspaper report that state aid was being considered for the embattled lender.

Munich at high risk of housing bubble: report
A view of Munich. Photo: Pexels.com

Considering buying property in Munich? This report might make you think twice.

After fatal hail storm, south Germany set to see sun
The hail storm in Baden-Württemberg on Monday night left the streets looking like a winter landscape. Photo: DPA.

A hail storm in southwest Germany on Monday night led to the death of one woman, but forecasters predict a bit more sun in the days to come.

Police shoot dead father who attacked daughter's abuser
Police at the scene of the shooting in Berlin. Photo: DPA.

Berlin police on Tuesday night shot and killed the father of a young girl at a refugee home as he tried to attack a man who allegedly sexually abused his daughter.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
15 pics that prove Germany is absolutely enchanting in autumn
Sponsored Article
Why Jordan is the ‘Different’ East
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Sponsored Article
Retiring abroad: ensuring your health is covered
Seven great reasons to stay in Germany this September
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Ten times Germans proved they really, really love beer
Six things you need to know when moving to Germany
These 10 little-known German towns are a must see
German scientists prove birds can sleep while flying
London v. Berlin: Which is better for startups?
13 mortifying mistakes German learners always make
Enter if you dare: Berlin's best abandoned haunts
10 rookie errors all Brits make when they arrive in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd