German regulator closes branch of Iceland bank

10th October 2008, Comments 0 comments

The bank had 30,800 customers in Germany and deposits totaling 308 million euros.

Bonn, Germany -- Germany's financial market regulator closed down the German branch of Icelandic bank Kaupthing Thursday, hours after Iceland's largest bank group was put under state control.

Bonn-based federal agency BaFin said Kaupthing was barred from selling assets, making payments or accepting any payments other than settlement of debts.

BaFin said it imposed the moratorium in order to secure assets amid fears the bank would not meet claims by creditors in Germany.

Kaupthing was the third of the North Atlantic nation's major banks to be taken over by the Icelandic Financial Supervisory Authority, after Landsbanki and Glitnir.

BaFin said Kaupthing had blocked online access by German customers to their accounts from Wednesday night.

It said the bank had 30,800 customers in Germany and deposits totaling 308 million euros. The bank declined to confirm this.

Chancellor Angela Merkel's Sunday promise that German savers would "not lose one euro" in a bank crash did not apply to Kaupthing because it was a foreign bank, a Finance Ministry spokesman told the Berliner Zeitung newspaper.

DPA/Expatica

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