Once Again Europe’s laws have to be adjusted to suit Germany

Date: 11-11-2013
Source: The Wall Street Journal
Subject: German Savings Banks Flex Political Muscle

Germany’s public savings banks have become the most powerful little lenders in the world, exploiting their political clout to punch loopholes into Europe’s postcrisis banking laws.

Untouched by the image problems that have beset big U.S. and European lenders, the banks, known as Sparkassen, can count on political ties reaching from local councils all the way to the federal government in Berlin and the European Parliament.

In late-night negotiations last December, German Finance Minister Wolfgang Schäuble ensured that day-to-day supervision of all but one of the 417 Sparkassen—the largest, the Hamburger Sparkasse is the exception—will remain in German hands, even when the European Central Bank becomes the euro zone’s banking policeman next year.

That deal, which limits direct supervision by the ECB to banks with more than €30 billion ($40.11 billion) in assets, looks set to keep the banks out of the reach of a new authority to wind down weak lenders, too.