German Bank Sets Precedent: Sues The ECB

In a move presaged by objections from politicians and some smaller EU financial institutions, Landeskreditbank Baden-Württemberg (or “L-Bank”, as its friends affectionately call it) is suing the ECB in a bid to avoid falling under the central bank’s direct supervision. L-Bank, a German development bank with some €71 billion in assets, argues that ECB supervision will subject it to onerous bureaucratic procedures and fees (imagine that), which it contends will prevent it from extending credit to local borrowers. 

Further, the small lender says that unlike the eurozone’s banking behemoths, its business model is straightforward and given its size, it would not represent a systemic risk even if it were to fail. Here’s more via WSJ:

The lawsuit, filed March 12, is the most radical step by a European bank against ECB supervision, a cornerstone of the eurozone’s integration project. It highlights the headwinds the ECB is facing from some politicians and smaller lenders in Germany, Europe’s biggest economy.

L-Bank said that higher costs tied to ECB supervision would undermine its ability to support local families and businesses. Instead it wants to be supervised by BaFin and the Bundesbank, which L-Bank says would be more appropriate, given its local focus.

Source Article from https://www.freedomsphoenix.com/News/173768-2015-04-04-german-bank-sets-precedent-sues-the-ecb.htm?EdNo=001&From=RSS

[ Add Comment ]

German Bank Sets Precedent: Sues The ECB