Ten billion euros of taxpayers’ money for IKB, 18.2 billion for Commerzbank, soon 150 billion for HRE and so on.
Hundreds of billions of euros to “pay off betting debts” and ongoing bonuses for investment bankers.
“Distributed there is the money of the citizens, which is thrown out the window with both hands – and the casino goes on”,
claim the two guest authors Albrecht Müller and Dr. Johannes Fiala and do not spare with criticism of the banks.
Every time a bank makes a restructuring loan to an ailing company, there are tough covenants:
Reduce salaries, economize on personal expenses, eliminate profit distributions, abandon loss-making casino business models. In the case of financial houses, however, this is precisely what is not happening. The state-controlled banks are also in on the act. As a role model, their foreign subsidiaries help clients evade taxes until the recent present. To this end, politicians invented the fairy tale of the surprise financial crisis from the USA in 2008.
But as early as February 24, 2003, the Handelsblatt reported that the German government was seeking a solution with the heads of the banks and insurance companies for the billions of bad risks that our banks and insurance companies had already accumulated at that time. And the financial houses had known since 1999 from the New York Times that various U.S. banks, under political pressure, had begun making home loans to buyers with no credit rating. The gambling casino for financial houses only works with the blessing of the politicians and only if the taxpayer is responsible for the losses in the end. A central responsibility for this lies with the Federal Ministry of Finance, as it actively participated in the development and introduction of the scrap papers. The packaging of bad claims into better sounding securities has been made easier.
Hedge funds were licensed in Germany in 2004. The looting of German companies by German and foreign so-called investors was made taxable from January 2002. To this day, these regulations remain virtually unchanged, which is an excellent basis for slipping right into the next financial crisis. Political leaders pretend to be careful with our money. The Finance Minister moves to rescue HRE with state money exactly one day after the liability of the former owner HypoVereinsbank expired on 28 September 2008.
In effect, a gift to this bank, at taxpayer expense. Politics has made the sell-out of the “financial centre Germany” possible in the first place: locusts achieve high returns by taking over a company with a minimal share of about 20 percent equity, taking on debts with high interest rates at the expense of the company and additionally burdening it with consulting contracts – this is what happened in variations with Grohe, Märklin, Hugo Boss and many others. The resulting unemployed must then again be financed by the taxpayer.
When asked what is required now, ex-hedge fund manager Jim Cremer recently said, “Show trials !”. Indeed, those responsible belong in the pillory. Politicians, on the other hand, tell us that we need more transparency and more regulation – the legal reality is the opposite. Even the government’s aid packages did not change this: the casino was not closed. Hundreds of thousands of investors were deprived of their money through complex financial products such as derivatives and certificates. Those responsible – including Josef Ackermann – will not be held accountable. SMEs should seek business links with financial houses that are healthy – with the usual five to eight per cent return on equity – and that have “members” such as cooperatives and insurance associations. No one is forced to require casino institutions through their own business connections. Even long-term and non-cancellable contracts can be terminated without notice if the financial institution is in a worse economic position – for example due to stock market bets.
We don’t have a liquidity crisis, we have a credit crisis. The banker’s rule of “if you have money, you get credit” has always applied. Debt reduction has become more important: Value-creating companies in the middle-market real economy can then more easily switch to solid financial houses. However, as long as the middle class does not drop the “bad banks”, politicians will continue to find reasons to sponsor “bad banking” with the citizens’ money.
by Albrecht Müller & Dr. Johannes Fiala
by courtesy of
www.der-siebdruck.de (published in Der Siebdruck 05/2009)
and
www.pt-magazin.de (published in P.T. Magazine, issue 03.2009, pages 36-37)
and
www.hm-infinity.de (published in Halstenbeker Magazin, issue 04/2009, pages 16-17)
and
www.handwerkermarkt.de (published on 25.01.2009 under the headline: Politically planned redistribution at the expense of the middle class)
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About the author
Dr. Johannes FialaPhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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