Two board members and a junior manager at German state owned lender KfW have been suspended over the transfer of 300 million euros to Lehman Brothers just hours before the US investment bank filed for bankruptcy protection.
There is huge embarrassment at the bank and in the German government. The country’s finance and economy ministers sit on KfW’s board.
Financial expert Wolfgang Gerke said: “You can only laugh about KfW. It is just unimaginable that somebody accidentally transfers 300 million euros to a company that is on brink of bankruptcy, and that information was already well known. A transfer like this has to be confirmed by the bank’s top bosses, even if it is a routine matter.”
The press had a field day with the mistake; one headline read: “Germany’s dumbest bank.”
There is outrage and disbelief among ordinary Germans. One man said: “Stupid! Really stupid! And we’re all paying for it. There are 80 million Germans, 300 million euro, that’s four euros each.”
The bank’s total loss – through that automatic transfer and other deals with Lehman Brothers – has been calculated at 536 million euros.