Germany’s Finance Ministry gave explicit backing in 2019 to financial regulator BaFin’s controversial approach to fraud accusations at Wirecard AG, raising questions about its role in one of the biggest corporate scandals in recent history, Bloomberg News reported. In a March 2019 phone call, Deputy Finance Minister Joerg Kukies gave the head of BaFin, Felix Hufeld, broad support for his efforts to investigate the allegations, according to briefing documents for a parliamentary hearing on Wirecard seen by Bloomberg.
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Germany has extended its lockdown measures by another month and imposed several new restrictions, including largely shutting down public life over Easter, in an effort to drive down the rate of coronavirus infections, the Associated Press reported. Speaking early Tuesday after a lengthy video call with the country’s 16 state governors, Chancellor Angela Merkel announced that restrictions previously set to run through March 28 will now remain in place until April 18.
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Germany aims to borrow 240.2 billion euros ($286 billion) this year, taking on just over 60 billion euros more debt than initially planned to help mitigate the impact of the coronavirus crisis, Bloomberg News reported. Heavy government spending is set to continue as the country grapples with a fresh wave of the pandemic.
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Mark Branson, the head of Switzerland’s financial markets regulator, is to become president of Germany’s finance watchdog BaFin, the finance ministry said on Monday, as part of a shake-up at the regulator after the Wirecard fraud, Reuters reported. Current BaFin president Felix Hufeld is leaving at the end of the month after coming under pressure for failing to spot wrongdoing ahead of the collapse of the payments company. The implosion of a former blue-chip hailed as a German success story and once worth $28 billion has embarrassed the government and damaged the country’s reputation.
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Germany is mulling around 70 billion euros ($83 billion) in extra debt spending this year to fight the fallout from the coronavirus crisis, Bloomberg News reported. Finance Minister Olaf Scholz needs those additional funds because the country’s lockdown is dragging on much longer than expected, the person said, cautioning that the exact number is still under discussion. Germany’s total new debt for this year will rise to 250 billion euros, Der Spiegel said, which reported the new spending plans earlier.
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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.