Buhlmann's Corner

Bank levy or responsibility money?

At last the world is getting better! The German government has recognized how this works: banks need to hand over money through the so-called bank levy, so they don’t go broke with the rest of the money. After all, it’s clear: those who have less, can go bankrupt for less. Anyone who does not understand that is evil, says the Chancellor, in heartfelt tones of credible argument.

It stands to reason that if you want to pick up responsibility, you have to get it from where there’s most of it. From the Deutsche Bank, then. Which has at least shown that it can live without government money and understands how to do business. How is one supposed to get responsibility money from HRE too? Speaking of HRE, by the way, to be honest it really ought to be Italy that’s saving it: after all, it’s Hypo’s bad bank, and Hypo now belongs to Italy’s Unicredit.

Instead, the German micro-bankers argue. What, HRE’s paying nothing? Promptly, along comes the Savings Bank of Biberach and demands the same thing. Let’s look instead from Berlin to Madrid. There’s a good payment candidate there too, the Banco Santander. It didn’t need anything from the State. It had three times as much responsibility and thus three times the payment obligations.

The regulators have a hard time, that’s true. But they need not fear a ruling to demonstrate their effectiveness and their formative rather than restorative responsibility. IKB, Northern Rock or Washington Mutual are ample proof of the clear failure of government oversight.