FRANKFURT (MNI) – European Central Bank Governing Council member
Axel Weber, who heads Germany’s Bundesbank, is responsible in large part
for the undercapitalization of German banks, a prominent member of the
country’s Green Party was quoted as saying on Tuesday.
The Green Party’s fiscal policy spokesman Gerhard Schick told
business daily Handelsblatt, “Axel Weber’s Bundesbank as banking
supervisor bears a considerable part of the blame for the fact that
German banks have sucked up junk paper like hardly any other investor
group and in international comparison are strongly undercapitalized
today.”
Banking supervisory responsibility in Germany is shared by the
Bundesbank and the Bafin, but the governing coalition under Chancellor
Angela Merkel favors consolidating supervision under the central bank.
Schick asserted that undercapitalized German banks are part of the
reason behind the ECB’s purchase of government bonds. Weber’s
“fundamental criticism” of that program is thus out of line, Schick
implied, since the need for the government bond purchases only arose
through “failures of his own institution.”
“Instead [of criticizing the ECB's government bond purchases], a
review of his own errors would be overdue and desirable,” Schick
criticized. “Inasmuch, Axel Weber does not stand for a credible new
beginning in monetary and bank supervisory policy, which, however, would
be urgently necessary in view of the errors made by the Bundesbank.”
The Bundesbank declined to comment.
— Frankfurt bureau tel.: +49 69 720142. Email: dbarwick@marketnews.com
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