Frankfurt, Berlin German banks can hope for an unexpected windfall. Federal Minister of Finance Christian Lindner (FDP) shows clear sympathy for returning excess funds from the national bank resolution fund to the banks. The money will then be used to finance the transformation of the German economy. This emerges from a briefing by the Ministry for the Finance Committee of the Bundestag, which is available to the Handelsblatt. First the blog “Finanz-szene” reported about it.
The money is contributions that German banks had to pay to the German bank resolution fund SRF, which was created at the time, after the financial crisis between 2011 and 2014. However, the national bank bailout funds became superfluous when the EU bank bailout fund was introduced. This EU crisis fund is likely to have reached its target volume by early 2024. Then the old contributions are no longer needed as bridge financing for the EU fund.
What should happen to the old posts afterwards has been hotly debated in Berlin for months. Since the funds were collected as a special levy and thus earmarked, according to a report by the legal scholar Ekkehart Reimer from the University of Heidelberg, they must not simply be included in the general federal budget.
The banks, in turn, have no legal right to a refund, which could also be problematic under state aid law. Another option would be to use the funds to settle the deficit of the Soffin financial market stabilization fund.
The Soffin had lost a lot of money over the years supporting banks. According to the Ministry of Finance, the Soffin’s losses at the end of 2021 amounted to 22.8 billion euros. However, the Federal Ministry of Finance rejects a partial debt relief for Soffin. A debt repayment of Soffin involves legal risks, since not all questions have been clarified by the highest court, it is said to be the justification.
Instead, Finance Minister Lindner’s department is planning a kind of earmarked repayment of the funds to the banks. The need for transformation in the German economy is high in the coming years.
“The German banking industry is demanding the reimbursement of the old funds and has declared its willingness to use them bindingly for additional financing of the transformation of the economy,” says the information from the Ministry of Finance. From the point of view of the ministry, a “refund of the old funds could support the banks in financing the transformation of the German economy”.
SPD wants to reduce debt from bank bailouts
Lindner’s initiative has met with mixed reactions among the governing parties. The Liberals support the ideas of their finance minister. “From the point of view of the FDP parliamentary group in the Bundestag, the return of the unused old funds from the bank levy to the original taxpayers can make sense if the banking industry actually implements its binding commitment to use the old funds for additional earmarked loans for the transformation of the economy “said the financial policy spokesman for the FDP, Markus Herbrand.
The Liberals do not want to rely on a mere promise from the banks: “The federal government would have to ensure watertight agreements that guarantee the greatest possible transparency in the allocation of funds,” says Herbrand.
In view of the necessary investments in climate neutrality, however, one should “fundamentally strengthen and expand credit instead of withdrawing it from the market cycle,” said the FDP financial expert. “Even if at first glance the use to compensate for deficits in the financial market stabilization fund sounds likeable despite the associated legal uncertainties, we should be guided in our decision by the question of where the amounts of money can have the best possible effect on the economy and society.”
The Social Democrats, on the other hand, prefer to use the old contributions to settle the Soffin debts. The report suggests that, said the spokesman for financial policy for the SPD parliamentary group, Michael Schrodi. The banks would have no legal right to a refund. “It is even stated that the legislator cannot simply have the old funds paid out to the banks simply because of restrictions under state aid law,” says Schrodi.
KfW could play a role in the use of funds
The argument that the funds should be used to finance climate protection does not convince the SPD finance expert. “Against the background of the high operating profits of the banks and the general lack of signs of a credit crunch in this area, there is little need for this,” said Schrodi.
The head of the citizens’ movement Finanzwende, Gerhard Schick, also considers the reference to transformation financing to be a pretense. Schick demands: “The banks must be involved in paying the costs of the financial crisis.” He describes Lindner’s plans as a “billion-dollar gift at the expense of taxpayers”. In particular, large institutions such as Deutsche Bank, whose contributions were particularly high, should benefit from such a refund.
In the scramble to use the old bank contributions, the state development bank KfW is repeatedly mentioned. People familiar with the affairs report two possible variants in which the state development bank KfW could come into play. In one variant, the old funds could flow directly into a KfW transformation fund. In the other variant, the money could first go to the banks, which in turn would then participate in the KfW transformation fund.
Politicians from different camps have probably already exchanged views with KfW. The parties involved remain silent about the results of these talks. What still gets through: In political circles, the topic seems to be discussed quite controversially. “There are advocates and critics for all variants,” reports one of the insiders. When asked by the Handelsblatt, KfW did not comment on the subject.
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