German finance minister blames bankers for crisis
30 November 2007, Berlin - German Finance Minister Peer Steinbrueck on Friday blamed the attitude of bankers for the global credit squeeze which has thrown financial markets into turmoil.
30 November 2007
Berlin - German Finance Minister Peer Steinbrueck on Friday blamed the attitude of bankers for the global credit squeeze which has thrown financial markets into turmoil.
In an interview with the Financial Times and its German edition Financial Times Deutschland, the finance minister said the "quality of managers" had proved a weakness.
"The snooty attitude that we have sometimes seen - under the motto of 'we are cleverer than the others' - ended in disaster," he said.
At the same time, the minister played down the impact on Europe's largest economy of the credit squeeze unleashed since August by the US housing loans crisis.
He said Germany's proposals made before the credit squeeze for greater transparency had been "mocked," but were now winning wider support as steps were being taken to increase awareness of risks.
German banks have been caught up in the credit squeeze, with one of the hardest hit, IKB, needing to be bailed out with a credit supplies by the rest of the banking industry.
The latest guarantees, issued after signs that IKB was in deeper trouble than first realized, add 350 million euros (520 million dollars) of extra protection to the previous 3.5-billion-euro guarantee by the bank pool.
This week, the German federal government's main banking arm, the KfW development bank, increased loss provisions on its balance sheet for IKB. It owns 38 per cent of IKB, which mainly finances small industrial companies.
In his interview, Steinbrueck said he did not fear a large "crossover effect" from the crisis on the German economy, which he expected to perform well next year even if at a slower growth than 2007.
He said domestic demand was picking up and exports would remain brisk, with demand from Russia, Eastern Europe and Asia offsetting a slowdown in the United States.
Referring to the strength of the euro against the dollar, he acknowledged it would have an affect on Germany, but said the stronger currency would curb the impact of higher oil prices.
"For us Europeans, we prefer a stronger euro than a weak euro," he said.
Subject: German news