EZA 892 Report:
28 April 2009
Germany – Banking - debate on toxic assets shaping up
- Since early Feb 09 the slowing in bank lending in Germany has turned up the heat on the debate on removing toxic assets and bad loans from banks’ balance sheets.
- At the 21 Apr government meeting two key options for dealing with the German bad loan problem (concerning €850bn) emerged; the SPV model and the AIDA model.
- These two are likely to be applied together, albeit in a sequential manner, from 01 Jul.
Asset conclusions: master plan for dealing with problematic assets might be just in time to prevent credit constraints from the supply side, helping recovery prospects and stocks.
© EZA
