BAILOUT FALLOUT

Trial Begins of Former HRE Bank Executives

On the first day of the Munich trial of HRE bank executives Georg Funke and Markus Fell, both the substance of the prosecution’s case and the contours of the defense strategy became clearer.

The former managers of HRE bank, facing charges of misrepresenting the bank’s financial situation and of market manipulation, are expected to claim that the overall climate in world finance was confused and unclear, and that misguided political interventions had more to do with the bank’s failures than the actions of its executives.

Speaking in court Monday, Mr. Funke’s defense lawyer pointed the finger at Germany’s finance minister at the time, Peer Steinbrück. “Ultimately, Mr. Steinbrück’s public intervention was the decisive factor – it was he who made comments that weren’t thought through, saying the bank would have to be wound up,” said Wolfgang Kreuzer, on behalf of Mr. Funke.

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