Regulator Revanche

Lies, Damn Lies and Bailouts

The protagonists. Former BHF Bank CFO Ingo Mandt, former Bafin head Jochen Sanio and Bafin official Frauke Menke (L-R). Source: DPA, Thomas Koehler/photothek.net, Christoph Papsch/Handelsblatt
The protagonists. Former BHF Bank CFO Ingo Mandt, former Bafin head Jochen Sanio and Bafin official Frauke Menke (L-R).
  • Why it matters

    Why it matters

    Jochen Sanio, Germany’s former top bank regulator, is on trial for his bailout of a German bank during the 2008 financial crisis.

  • Facts

    Facts

    • Germany’s Bafin regulator spent more than €20 billion bailing out banks during the financial crisis.
    • Sal. Oppenheim received a €100 million loan from a subsidiary, BHF Bank, to keep the parent bank afloat.
    • Prosecutors in Cologne are investigating whether the BHF Bank loan was too risky and legally improper.
  • Audio

    Audio

  • Pdf

It was a time of high drama, bullying and backroom deals around the world in late 2008 as regulators clashed with bankers over the survival of the global financial system.

Some banks were forced to close, others were bailed out by governments, and still others were swallowed by larger and more stable competitors – to clean up the mess sparked by the collapse of the U.S. housing market and the bankruptcy of Lehman Brothers.

Banks have long complained that regulators pressured managers to swallow bad banks – think of Bank of America agreeing to buy U.S. investment bank Merrill Lynch, just hours after Lehman Brothers collapsed, over one heady weekend in September 2008.

But was there blackmail?

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