Thursday, November 6, 2008

The usual suspects

Today, Spiegel Online reported (here) that KfW, the German bank that transferred hundreds of millions of Euros to Lehman Brothers on the day that the investment bank went bust and has become notorious as "Germany's dumbest bank", now has admitted to have sustained losses in relation to Icelandic banks as well.

A total amount of EUR 288m appears to have been invested there. Some of the money is expected to be lost, said a spokesperson for the bank on Thursday. A large proportion (EUR 150m) of the above mentioned amount relates to a credit that was given to Glitnir Bank. Another EUR 138 m had been invested by KfW in bonds issued by Kaupthing, Landsbanki and Glitnir, the three icelandic banks that are now under administration. It remains to be seen if KfW's hopes to claw back large amounts of these debts are realistic.

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