Germany's Social Democrats (SPD) oppose creating a "bad bank" to house lenders' toxic assets as the government considers steps to shift such assets off balance sheets, the party's leader was quoted on Saturday as saying. Franz Muentefering, whose SPD shares power with Chancellor Angela Merkel's Christian Democrats (CDU), said the toxic assets.
Which have been blamed for undermining confidence in the struggling banking industry, cannot be dumped on taxpayers. But a regional leader in Merkel's CDU, Baden-Wuerttemberg state premier Guenther Oettinger, reaffirmed his support for creating such an institution to relieve the burden on banks.
The government said this week it was considering how to resolve the issue, but most senior politicians from both ruling parties have firmly rejected the "bad bank" model put forward by some in the private sector. "That would be a state-administered and state-financed toxic waste dump for everything that bankers ruined and now want to get rid of," Muentefering told Frankfurter Allgemeine Sonntagszeitung in an advance ahead of Sunday's publication.
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