Germany’s lower house of parliament today approved the country’s “bad banks” plan in a bid to end the worst German recession since the second world war.
The plan will allow banks to shed their rotten assets and place them in state-supported special purpose vehicles, which can allow for their quiet disposal over a number of years, and even in some cases allow bad assets to be restored to health. Germany’s finance minister also wants to hunt down the crooks; “In the situation we are in right now it is important that wide sections of the population don’t think that we treat tax evasion and tax fraud as a simple misdemenour; it is criminal. It is damaging to Germany as a business location,” said Peer Steinbrück. Many institutions in Germany’s complicated network of national and state banks are sitting on bad assets, and they are all eligible to take part in the scheme. But the bill’s clauses on tax evasion also spells the end of Germans hiding money in secret accounts abroad, as they will now have to inform the authorites if they use tax haven facilities. However some are saying throwing so much money at the banks nine months after the crisis broke, and when liquidity seems less of a problem, is a case of too much, too late.