German Banks Unwilling To Release Sovereign Debt Holdings

Today’s Financial Times front-page: Germany accused of reneging on bank tests.

The tests – designed to restore nervous markets’ faith in European banks, shaken by the near-default of Greece this year – were supposed to be accompanied by full disclosure of each bank’s sovereign debt holdings.

But six of the 14 German banks tested – Deutsche Bank, Postbank, Hypo Real Estate, mutual groups DZ and WGZ, and Landesbank Berlin – did not publish the expected detailed breakdown of sovereign debt holdings, although Postbank disclosed some information on Sunday.

Officials from the German regulatory authorities – Bafin and the Bundesbank – said local law meant they could not force banks to publish such details.

However, one banker told the FT: “There was a discussion in Germany about whether to publish the sovereign debt holdings, and at one point the banks were told that it was to be compulsory, but in the end Bafin did not require it.”

This entry was posted on Monday, July 26th, 2010 at 1:52 am and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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