Helmut Schmidt can look back on many shining moments as a politician. One of his brightest was as crisis manager in Hamburg during the catastrophic North Sea flood of 1962.
At the time, the future chancellor used German armed forces to save victims. Whether the constitution allowed the Bundeswehr to be used in times of domestic emergency was of little concern to Mr. Schmidt in those dramatic hours. He acted pragmatically to save human lives.
When the great financial crisis rocked national economies around the globe after 2008, human lives weren’t at stake but imminent catastrophe called for pragmatism as well. The stability of the world’s financial system hung in the balance.
Politicians and regulators – like Jochen Sanio, then head of the German Financial Supervisory Authority (BaFin) – were forced to make critical decisions under enormous time pressure. The entire German economy hinged on quick action.
This was also true in the case of the troubled private bank, Sal. Oppenheim, and the controversial loan by its Frankfurt subsidiary, BHF Bank, intended to ensure Oppenheim’s liquidity.