Prosecutors drop 'Germany's stupidest bankers' probe

7th September 2010, Comments 0 comments

German prosecutors said Tuesday they had dropped a probe into six bankers from state-owned KfW for transferring some 320 million euros (408 million dollars) to Lehman Brothers after it had collapsed.

The probe into five executives and a top risk-control manager over the erroneous transfer, which made Germany a laughing stock in the finance world, has been shelved "for lack of evidence" of wrongdoing, prosecutors said.

When the affair came to light, KfW fired three directors involved with the error. The press dubbed the trio "Germany's stupidest bankers."

The transfer, part of a swap arrangement between the two institutions, was conducted 14 minutes after Lehman Brothers declared the biggest insolvency in US banking history.

"For them, as for the rest of the international world of finance, the insolvency of Lehman Brothers came as a complete surprise," prosecutor Thomas Bechtel said.

Moreover, the boss of the bank at the time had been in his post for a mere two weeks and had not yet examined the firm's risk management systems, the prosecutors concluded.

© 2010 AFP

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