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Germans agonise over Hypo

A couple of weeks ago, I blogged about Germany's Black Swan Banks.

Now, Chancellor Angela Merkel is set to change German law to seize private property back, for the first time since the War, in order to fully nationalise Hypo Real Estate (HRE).

According to the German newspaper Weld, "the German government has agonised over an 'Enteignung' of Hypo
shareholders, a loaded term linked in the minds of many Germans to Nazi
seizures of Jewish property in the 1930s and East Germany’s assault on
private business after World War Two."

However, as they cannot reach an agreement with the American Private Equity firm JC Flowers, who own 25% of HRE, they are being forced into a position to do this, which follows the example of Britain and Ireland with RBS, HBOS and Anglo-Irish.

This crisis is causing many of us to rethink our ways, and Germany is no exception.

UPDATE FROM THE BBC:

"The German cabinet has agreed on a draft law that will allow it to temporarily nationalise troubled banks. The law would allow private sector banks to be nationalised through
the seizure of their shares to support Germany's financial system.  The draft law, which still has to be approved by the German parliament, said nationalisation would be a last resort.

"The law is seen paving the way for the government to take over stricken German property lender Hypo Real Estate. The lender's situation remains shaky despite a
total of €102 billion ($128 billion) in guarantees it has received from
the government and other banks since October."

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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