By CHRISTEL KUCHARZ, ABC News Producer, Germany
While the German stock market is still a bit nervous and investors here are anxious about keeping their heads above water, there are some German financial institutions that see the current Wall Street crisis as a chance to enter lucrative U.S. markets.
Others, however, like the state-owned development bank KfW (Kreditanstalt für Wiederaufbau), are coming under scrutiny.
Today’s edition of the tabloid Bild Zeitung calls KfW “the dumbest bank in Germany” for losing “300 million euros [about $425 million] in an erroneous swap.”
Germans were shocked by news that the KfW Bank made an ill-timed $425 million transfer to Lehman Brothers on the very day the latter filed for bankruptcy protection.
“It’s a scandal, it’s shocking”, Bild Zeitung told its readers. “How could that possibly happen?”
The KfW bank declined to comment in detail on the transfer, citing an ongoing internal audit, but it did release a statement saying the transfer was made in a swap deal of a kind that is generally based on long-term contractual obligations.
The transfer exposed the government-owned KfW to $425 million in losses, triggering criticism from the Finance Ministry.
Ministry spokesman Torsten Albig told reporters in Berlin the news “was more than surprising and annoying and the government expects a very quick explanation how that could happen. For us, it is inexplicable.”
KfW’s administrative board is meeting today and the "erroneous transfer" is high on the agenda.