Germany’s financial regulator Bafin has submitted a filing to a court in Bremen to start insolvency proceedings for Greensill Bank, a spokeswoman for the court said on Tuesday, Reuters reported. Greensill Bank was locked down by BaFin this month with a warning that there was an imminent risk that its debt would become unmanageable. The regulator also questioned some of the bank’s financial accounts. “We received an application from BaFin yesterday (Monday) evening to open insolvency proceedings regarding Greensill Bank AG,” a spokeswoman for the district court told Reuters.
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A German court on Tuesday declared that a small bank tied to a collapsed U.K. finance company was insolvent, triggering losses for dozens of small German towns, the Wall Street Journal reported. Greensill Bank AG was deemed insolvent by a local court, leaving the towns as creditors that will likely sustain losses. Around Germany, at least 12 towns with a combined €200 million, equivalent to about $238 million, in deposits are in the same situation. Individual depositors are covered by insurance. Among them is Mengen, a tiny municipality in southwestern Germany.
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Deutsche Bank AG is acting as a broker for some investors who are keen to sell their holdings in Credit Suisse Group AG’s supply-chain funds that bought products from Greensill Capital, Bloomberg News reported. The German bank has contacted hedge funds and investment firms to gauge interest for a deal. It’s unclear how many investors are looking to sell and at what price. Credit Suisse started liquidating $10 billion of funds earlier this month after insurance covering some of the debt packaged by Greensill lapsed.
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German business groups expressed dismay on Thursday after Chancellor Angela Merkel and state leaders agreed a gradual easing of coronavirus curbs but added an “emergency brake” to reimpose restrictions if case numbers get out of control, Reuters reported. The tentative reopening plan dashed any hopes of a swift rebound in consumer spending this month to end a weak first quarter on a stronger note. Some economists also worried about long-term damage to the economy and people’s opportunities in life.
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Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moves toward a deal to sell its operating business to Apollo Global Management, the Wall Street Journal reported. Also Wednesday, in a dramatic ratcheting up of Greensill’s problems, Germany’s top financial regulator BaFin referred matters related to the firm’s banking unit, Greensill Bank AG, to criminal prosecutors, according to a spokesman for the Bremen prosecutors office.
Interest rates have been negative in Europe for years. But it took the flood of savings unleashed in the pandemic for banks finally to charge depositors in earnest, the Wall Street Journal reported. Germany’s biggest lenders, Deutsche Bank AG and Commerzbank A , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say that they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.
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The head of Germany’s accounting watchdog, under fire for failing to spot wrongdoing ahead of the collapse of the payments company Wirecard, is stepping down, Reuters reported. The agency, formally known as the Financial Reporting Enforcement Panel (FREP), said in a statement on Wednesday that President Edgar Ernst is leaving his post at his own wish, effective Dec. 31. Ernst has also come under criticism for potential conflicts of interest because he held seats on supervisory boards of major corporations, including real-estate company Vonovia, retailer Metro and tour operator TUI.
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German brewers have been forced to throw away unsold beer and have asked the government for financial aid as the coronavirus lockdown reduces demand, they said on Monday, Reuters reported. German pubs, hotels and restaurants have been closed since November in the country’s second lockdown following the first one earlier last year. The brewers called on the German government to give beer breweries aid under the country’s programmes to help industry recover from the impact of the coronavirus crisis. Germany’s government has given financial aid to pubs and bars but not breweries.
German Finance Minister Olaf Scholz warned next year’s federal budget will be a “challenge,” while pledging not to cut investment or welfare spending, Bloomberg News reported. Scholz, who is running as the Social Democrats’ candidate for chancellor in September’s election, is due to present a draft 2022 budget next month. His comments highlight the fiscal conundrum facing the next government, which polls suggest will again be led by Chancellor Angela Merkel’s conservative bloc after she steps down.
Airline maintenance provider Lufthansa Technik Philippines (LTP) will lay off 300 employees in April due to the impact of the COVID-19 pandemic on the airline industry that forced some of its clients into bankruptcy, The Star reported. "This decision comes after careful study and consideration of the business situation as a result of the pandemic, its effects on the aviation industry," LTP president and CEO Elmar Lutter said in a letter to employees dated Feb. 11.