Aiding the Rescue
October 18, 2008
Private and regional banks will discuss the common approach, an upcoming edition of Focus magazine due to be published Monday said, citing an unnamed senior bank official.
Martin Blessing, the head of Commerzbank -- the country's second largest -- meanwhile told the Bild daily in an interview published Saturday that the bank would minutely examine the aid package.
"We will carefully examine the measures to see if they will interest us," he said.
However, Deutsche Bank AG's chief executive has been quoted as saying that his company doesn't need an injection of capital under the government's financial rescue package.
Deutsche Bank refutes need for state aid
The Bild am Sonntag weekly reports in a preview of its Sunday edition that Josef Ackermann said Deutsche Bank has "at no point" been in danger during the financial market crisis.
"Deutsche Bank does not need capital from the state,"Ackermann was quoted as saying Saturday
The package, rushed through the German parliament on Friday and immediately signed into law, comes into effect on Monday.
Starting on Monday, banks can make direct requests for guarantees on loans of less than 36 months from other banks, with the government setting aside 400 billion euros for the purpose.
Banks can also ask the state for fresh funds in exchange for equity stakes, from another fund worth a total 80 billion euros.
Accords between the banks and the state are to be established on a case-by-case basis and will only be made public if a bank's by-laws require it.
Otherwise, they will remain confidential, said Finance Ministry spokesman Torsten Albig.
Banks must accept conditions before aid is agreed
Banks must accept certain conditions in return for the aid, with the state being given a say in bank strategy, the use of the funds, remuneration of state organs and dividend policy.
Other conditions are to be established during a cabinet meeting early Monday or on a case-by-case basis.
The finance ministry would like to set a limit of 500,000 euros on wages for top directors of banks that accept money and ban dividend payments.
The fund will exist until December 31, 2009, at which point it is to be liquidated "in the best interest of taxpayers."
If the state still owns shares in banks, it will sell them at the right time for the best price.
It is only then that the total cost to taxpayers will be known. The charge is to be shared by federal authorities and individual states on a basis of 65 percent to 35 percent.