account
search
search

German managers fired for Lehman blunder

  |   Sept. 19, 2008 at 10:39 AM
BERLIN, Sept. 19 (UPI) -- Two board members of a German state-owned bank were suspended over the loss of more than $760 million because of risky deals with ailing Lehman Brothers.

The state lender KfW transferred some $500 million to the U.S. bank on the day it filed for bankruptcy protection, a transaction that has German politicians fuming. The remainder of the money was transferred in the days before.

That the transfer took place "is a clear signal that the risk management … is not intact at KfW," a visibly angry German Finance Minister Peer Steinbrueck told reporters in Berlin Thursday.

Germany's mass-selling daily Bild was more blunt: On its Web site Friday, it ran the headline "Germany's dumbest bankers" over the pictures of KfW's management board members.

The bank's advisory board, which includes German Economy Minister Michael Glos, suspended two of those bankers: Peter Fleischer, who oversaw lending, and Detlef Leinberger, the head of the risk-management department at KfW.

Observers are now calling for a structural overhaul of the bank.

"A bank that has political influence can't function properly," Otto Fricke, a senior Free Democrat lawmaker, told German news channel n-tv. "I have never experienced such a way of acting, and wasting so many millions of taxpayers' money must have parliamentarian and political consequences."

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
x
Feedback