A German state minister has blamed the European Union (EU) for problems in the state Landesbank banking system.Dr Werner Marnette, a minister in the government of Schleswig Holstein, said banks changed their operations when the EU told them to be more competitive. Dr Marnette said he refused to sign bail-out packages for state banks such as HSH, which is part-owned by Schleswig Holstein. He said HSH Nordbank had made huge losses on complex credit investments. 'Lost contact'"In former times when these Landesbanks gave credit to a company, the risk was covered by the state," he told the BBC World Service's Business Daily.
A German state minister has blamed the European Union (EU) for problems in the state Landesbank banking system.
Dr Werner Marnette, a minister in the government of Schleswig Holstein, said banks changed their operations when the EU told them to be more competitive.
Dr Marnette said he refused to sign bail-out packages for state banks such as HSH, which is part-owned by Schleswig Holstein.
He said HSH Nordbank had made huge losses on complex credit investments.
'Lost contact'
"In former times when these Landesbanks gave credit to a company, the risk was covered by the state," he told the BBC World Service's Business Daily.
Afte the State guarantee was gone, funds were more expensive, and they were no longer competitive lending to German industry, and thus had to go and lend elsewehre to get a good return - elsewhere being way too risky for the price, as it turned out.
So yes, they were inefficient and subsidized, but it seems they did their job better then than now. In the long run, we're all dead. John Maynard Keynes
