Germany Prepares New Rescue Methods for Banks
Plans are being drawn up in Germany to allow banks threatened with bankruptcy to be put into receivership administered by the state, according to the draft of a bill obtained by the daily Süddeutsche Zeitung, The New York Times DealBook blog reported. The measures would discourage banks from engaging in the riskiest activities on the assumption that public money would bail them out in times of crisis, the newspaper cited the draft as saying. Karl-Theodor zu Guttenberg, the German minister of economics, wants to give the state an alternative to emergency nationalization, which is what happened with Hypo Real Estate, the commercial lender taken over in April after €102 billion ($147 billion) of bailout money, the most expensive rescue in the country’s history. Read more.