What we haven’t been through with the German state banks. For a long time they were a figurehead, as they promoted German medium-sized companies with loans that private banks were not willing to give. But it didn’t stop with this image. In Hesse, the Landesbank got entangled in real estate transactions 50 years ago that cost the state billions. At that time it was a political issue that Prime Minister Albert Osswald was Chairman of the Board of Directors of Helaba.
I want to spare you, dear readers, a list that would be necessary for a halfway complete scandal chronicle of the German state banks. In the meantime, business administration students are already learning: There was hardly a stupid idea that our state-owned banks were not enthusiastic about.
The pinnacle of course was the financial crisis that began in 2007. No banker or financial politician has ever explained conclusively why German state banks bought securities whose value depended on the ability of American homeowners to pay. The rescue of the state banks cost 40 billion euros at the time. It can happen.
And what does a Landesbanker do when his owner pulls him out of the mud? He reaches into his pockets. Cum-Ex was the principle. Stocks were traded in circles to recover taxes that had not been paid. The Landesbanken made many of these cum-ex deals at the time when they were on the state drip.
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Private banks did the same. And in March 2020, when Roland Zickler, as presiding judge at the Bonn Regional Court, gave the first cum-ex verdict, one could hear a world view faltering. “We heard things here that are actually unbelievable,” says Zickler. “If you join a circle of crooks, you can’t say that there were only crooks around me, they all did it. Do we want to live in a world where everyone cheats on everyone else?”
Clear words from a judge’s mouth
Clear words, especially from a judge’s mouth. The good news: Zickler’s verdict has now been confirmed by the highest court. The Federal Fiscal Court, the Federal Court of Justice and the Federal Administrative Court all consider cum-ex transactions to be illegal and punishable. The bad news: Word hasn’t gotten around to everyone yet.
In Hamburg, for example, the public prosecutor’s office didn’t even want to investigate when they found out that Bank MM Warburg had damaged the state by millions. Only after the Cologne public prosecutor’s office took up the trail and the Bonn district court made judgments did the MM Warburg have to give up their loot. In May 2022, Hamburg’s First Mayor Peter Tschentscher considered all the fuss about it unnecessary in the committee of inquiry. The bank repaid the money, said Tschentscher and said: “There was no damage. What has remained are adventurous claims.”
What is this man’s understanding of the law? The situation in Hamburg was comparable to this scene: a bank robber marches out of a bank with a bag of money on his back, is greeted politely by the police and later received by the mayor to discuss whether it is really necessary to get away from the stolen millions separate. No Hamburg authority had a share in the repayment – 15 years after the fact.
Unworldly politicians
How unworldly does a politician have to be if he doesn’t understand the damage this causes? Trust in the rule of law, trust in politics. And so Tschentscher is wrong. It is not the criticism of him and his authorities that is adventurous. It’s Tschentscher. He should go.
He won’t do that. We no longer live in a time when Albert Osswald resigned in 1976 to assume political responsibility for the Helaba real estate scandal. Apparently not a single politician who sat on the board of directors of a cum-ex bank even considered whether he should draw any conclusions from it. Most explain their lack of control simply by not knowing about it. The board didn’t tell you anything about it.
The world is that simple when you sit on the supervisory board of a state bank for a few tens of thousands of euros plus attendance fees and expenses. You simply listen to what the board says about the business. If he doesn’t say anything bad, you don’t suspect anything bad either.
What follows? Nothing at all. Certainly, there are more than 100 cum-ex proceedings in Germany and more than 1500 suspects. But I have been reporting on this scandal together with my colleagues at the Handelsblatt for many years. There are no signs that politicians’ failure to control themselves gives them reason to doubt themselves.
Defeatism is not a nice ending to a commentary. Let me put it this way: In the end, Germany will remain exactly the state banks that their representatives deserve. And you and I, dear readers, we pay.
More: Damages in the billions: state banks sink into cum-ex affair