Mooted government help to rescue troubled German business lender IKB has drawn cool comment from political figures ahead of an emergency meeting on the issue on Wednesday, press reports said.
"It is not right that banks keep profits for themselves when all is going well and distribute losses in situations such as this," the budgetary spokesman for the conservative CDU party, Steffen Kampeter told the financial daily Handelsblatt.
Otto Fricke, president of the liberal FDP party's parliamentary budget group, added: "Public debt must in no case rise as the result of an IKB rescue." The specialist in loans to small and medium sized enterprises has benefited from two emergency packages worth billion of euros but press reports say it now needs two billion euros (2.9 billion dollars) more.
The German government, which owns 38 percent of IKB via state development bank KfW, is now mulling a third plan to help the troubled lender, which invested heavily in securities backed by high-risk US mortgages on which borrowers have defaulted in large numbers.
The supervisory board of KfW, presided by Economy Minister Michael Glos, was to meet Wednesday in Berlin to discuss the situation at IKB, while public and private banks that took part in earlier rescue plans appeared reluctant to extend further aid. FDP lawmakers in the lower house of parliament now intend to call for a probe of the IKB crisis, party deputy president Rainer Bruederle told the Berliner Zeitung newspaper.
With KfW reportedly unable to provide another two billion euros, the government was said to be mulling several options, including a sale of shares in logistics group Deutsche Post, in which the state holds a 31 percent stake. Another mooted possibility would be a Deutsche Post convertible bond issue worth around one billion euros.
But while that might meet IKB's immediate need for 500 million euros, it would still not be enough. CDU lawmakers have also begun to call for the resignation of Ingrid Matthaues-Maier, a Social Democrat who presides the IKB management board.
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