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Hell will freeze over before the German government lets Deutsche Bank go bust. They let Greece go bust rather than the Landesbank.
by Malarkey73 10y ago
Hell will freeze over before the German government lets Deutsche Bank go bust.
They let Greece go bust rather than the Landesbank.
- cm2187 10y agoActually I think what would happen would neither be a bail out or DB going bust, but a bail-in (which I described in another post): https://news.ycombinator.com/item?id=12065996 https://news.ycombinator.com/item?id=12065996
- tim333 10y ago>They let Greece go bust rather than the Landesbank. It more a case they may have to bail out Greece rather than letting it default and take out the Landesbank. A lot of the problems could be prevented by the German controlled ECB easing monetary policy and aiming for say 2% inflation rather than the present 0%.
- Tomte 10y agoAs I like to point out whenever people claim that the ECB is controlled by Germany: Germany has a very small minority of the votes in the controlling gremium.
- tim333 10y agoFair enough - my bad.
- Malarkey73 10y agoInfluence in the Euro institutions is largely determined by the size of the economies and their contributions to the budget. Germany is first among equals.
- Tomte 10y agoAs long as we're talking votes, not "soft power", Germany is a dwarf. European institutions are largely determined by "every member gets something", not economic size. In this example, the Governing Council of the ECB has 25 members, two of which are German. It is "first among equals" in the sense that no country has more members and few have as many, but what you're insinuating is factually wrong. When it comes to any European organization, just assume that each member country has one vote and you'll always be very close to reality.
- Malarkey73 10y agoI'm sorry - I don't mean to imply that Germany is all powerful. The power dynamics of different EU institutions are complex and sometime unwieldy. And often a single country can block something. However I respectfully disagree with your last sentence - assuming each country has equal power is not reality but fantasy.
- pgeorgi 10y agoThe various Landesbanken (banks of the states), the Bundesbank (federal bank) and KfW (kinda the federal investment bank) will be kept afloat in some way (although there might be mergers, as there were in the past), since they're public entities. However Deutsche Bank is a private company. It's still likely to be kept alive, but it's not as certain.
- jsemrau 10y agoYou are right that DB is private, nevertheless the bank is deeply intertwined with financing the Deutschland AG. Without them Daimler, BMW, Bosch, etc all would have to find new partners for financing their day to day operations.