Minister urges merger of Germany’s Landesbanks
by Gill Montia
Story link: Minister urges merger of Germany’s Landesbanks
Germany’s Federal Minister for Economics and Technology is urging the country’s Landesbanks to merge.
The state-owned lenders number 11 covering different regions and specialising in financing small and medium-sized enterprises.
Some have faced heavy losses during the credit crisis and as reported in Germany’s Tagesspiegel newspaper, Rainer Brüderle is now demanding a shake up of the whole sector.
The banks once enjoyed state guarantees but lost their privileges in 2005 after a long battle with the European Commission, which had received complaints from Germany’s privately owned banks over competition issues.
The guarantees allowed Landesbanks to lend at low rates because they could borrow more cheaply than their rivals.