Red faces in Berlin over massive banking error

Red faces in Berlin over massive banking error
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The German government is under pressure to explain a massive accounting error at a struggling bank nationalised in 2009.

The discovery of the mistake means that Germany is now 55.5 billion euros richer, making its national debt lower than first thought.

While that is good news, opposition MPs want answers. FDP deputy Volker Wissing said: “This doesn’t make sense and needs to be clarified urgently. It shows that obviously there are exceptional conditions for the financial markets, institutions and also for financial policy.”

The government says the oversight is yet to be clarified, but it welcomes any reduction in debt.

SPD deputy Thomas Opperman said: “Finance minister Schauble alone is responsible for the HRE bad bank being managed properly and being supervised correctly.”

On Monday Schaeuble’s spokesman Martin Kotthaus tried to deflect any blame, saying the ministry received a certified statement from the bank’s auditors that the balance sheets had been checked and approved.

He said it was too early to tell exactly who messed up. “It’s annoying, to put it diplomatically, when corrections
of this dimension are necessary,” said Kotthaus, who was grilled at a news conference. “We had a certified audit of the annual accounts for 2010 and it said everything was in order.”

Kotthaus said the bank itself was responsible for its annual report.

Germany’s national debt will now drop by 2.6 percent.

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