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Commerzbank: The First Of Many Bank Nationalisations?

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    December 6, 2011

    Via Google Translate [with some minor tweaks by me where obvious], Spiegel Online reports Federal Government is considering nationalization of Commerzbank

    After the end of 2008, the institute plunged into the vortex of the financial crisis and needed financial assistance. The federal government holds 25 percent plus one share. Germany wanted Commerzbank CEO Martin Blessing to be independent again as quickly as possible . But now SPIEGEL reports information the contrary, that the federal government does not rule out the nationalization of Commerzbank.

    If Commerzbank, the second largest German bank does not manage to get hold of enough capital by next summer, Germany will resume the Berlin bank rescue fund Soffin and take on additional shares according to government sources.

    Commerzbank Desperately Needs Money

    In a separate article Spiegel Online reports Commerzbank considers selling daughter bank € Hypo

    Commerzbank desperately needs money in order to guard against the debt crisis in Europe. Now the bank is considering, according to a newspaper report, to sell his daughter € Hypo – to the state. In the deal, the bank would have suffered a considerable loss.

    Frankfurt – The tougher capital requirements of European Banking Supervisors, Commerzbank EBA could move to a sale: The bank is considering a report from the “Financial Times Germany” According to cede their property financier Hypo € at a loss to the state. The money would house the gap to nine percent core capital, reduce the EBA demands from next year. In addition, Commerzbank would prevent the EU Commission to initiate a re-aid procedures.

    The bank missing about three to five billion euros in order to meet the requirements of the EBA, as was recently announced. The real estate financier, who is otherwise deficient, does not belong anyway more to the core business of Commerzbank Chart show . In addition, a sale would reduce the balance of the institute. By the end of 2014, it must repel the daughter anyway, to meet EU requirements for assistance during the financial crisis.

    First of Many Nationalizations

    Should Commerzbank be nationalized, it will likely be the first of many major nationalizations.

    Mike “Mish” Shedlock
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    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.


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