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German banks remain silent after warning

by Richard Milne in Frank­furt

Ger­man banks, locked in a cri­sis over the fall­out from volatile cred­it mar­kets, have adopt­ed a curi­ous strat­e­gy over their increas­ing image prob­lem: silence.

After the head of a region­al bank warned that the sit­u­a­tion of Ger­man banks was crit­i­cal as some for­eign banks were refus­ing to lend to them, top exec­u­tives at oth­er finan­cial insti­tu­tions have decid­ed to gag them­selves.

“Giv­en the sit­u­a­tion in the finan­cial mar­kets, the main com­mer­cial banks have decid­ed to refrain from com­ment­ing in pub­lic on the gen­er­al mar­ket sit­u­a­tion,” said an e‑mail from the head of com­mu­ni­ca­tions at Dres­d­ner Bank to jour­nal­ists to explain why its chief exec­u­tive was can­celling a meet­ing.

The asso­ci­a­tion of Ger­man banks, the BdB, which rep­re­sents the main com­mer­cial insti­tu­tions, was keen to under­line that there was no for­mal ban on exec­u­tives speak­ing out. But an offi­cial said: “The banks have said they don’t want to cause any more uncer­tain­ty by speak­ing out.”

Many finan­cial exec­u­tives were dis­mayed by the reac­tion to com­ments by Alexan­der Stuhlmann, chief exec­u­tive of West­LB, warn­ing that Ger­man banks were hav­ing dif­fi­cul­ties get­ting cred­it from for­eign insti­tu­tions. “That was a com­plete mess- up,” said one senior exec­u­tive.

Oth­er actors in the Ger­man finan­cial sys­tem are also keep­ing their own coun­sel, despite com­ing under severe pres­sure to jus­ti­fy their actions. The Bun­des­bank, the cen­tral bank, has said very lit­tle since its head called a state-led bail-out of one bank an “iso­lat­ed” inci­dent in mid-August – only for the res­cue of anoth­er bank to be nec­es­sary days lat­er. Like­wise Bafin, the finan­cial reg­u­la­tor, has said lit­tle despite crit­i­cism of its han­dling of the sit­u­a­tion.

Some Ger­man exec­u­tives com­plain that this reluc­tance to speak out hurts the coun­try and its image.


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