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Two million euros gone? City of Puchheim affected by bank over-indebtedness

2021-03-09T10:40:52.164Z

The city of Puchheim is threatened with a major financial loss. Two million euros could be lost because of an investment. Puchheim - As it became known last Wednesday evening, March 3, 2021, the Federal Financial Supervisory Authority (BaFin) ordered a moratorium on Greensill Bank AG. According to BaFin, the moratorium had to be ordered due to the threat of over-indebtedness in order to secure th



The city of Puchheim is threatened with a major financial loss.

Two million euros could be lost because of an investment.

Puchheim - As it became known last Wednesday evening, March 3, 2021, the Federal Financial Supervisory Authority (BaFin) ordered a moratorium on Greensill Bank AG.

According to BaFin, the moratorium had to be ordered due to the threat of over-indebtedness in order to secure the bank's assets in an orderly process.

BaFin has also filed a criminal complaint for manipulating the balance sheet.

The city of Puchheim, which has invested two million euros in Greensill Bank, is also one of the potentially injured parties.

The city announced in a statement.

According to press reports, in addition to numerous private investors, 50 municipalities - including the city of Osnabrück, the city of Monheim and, in Bavaria, the municipality of Vaterstetten - are said to be affected by the threatened liquidation of the bank.

First Mayor Norbert Seidl: “I am shocked and appalled by this news.

We didn't do any speculative financial transactions with opaque products, but rather conservatively invested fixed-term deposits with a German bank.

Apparently not only we, but also many other savers and investors have become victims of criminal machinations.

BaFin hesitated too long. "

Which deposit is it about?


The city treasury has currently invested two million euros as a fixed deposit with Greensill Bank AG.

It is a classic time deposit against a fixed interest rate (0.05 percent).

What are the consequences of bankruptcy?


While the investments of private investors are protected by the deposit protection fund of the German banks when the compensation event is determined by the BaFin, there is no comparable protection for the so-called institutional investors.

It will depend on the amount of the remaining assets of the bank and the amount of the claims of other creditors whether and, if so, to what extent the claims of the city can be serviced.

A total loss of the deposit is also possible.

However, more details can probably only be said after the end of the moratorium.

Why was the money invested in Greensill Bank?


Greensill Bank is based in Germany, has a German banking license and is a member of the Association of German Banks and the Deposit Protection Fund.

The business policy of the up-and-coming bank consisted, among other things, of addressing small savers with above-average interest rates (“world saving”).

It has been perceived as a broad-based public bank that does not only target a few large investors.

The bank was also rated well in 2020.

The investment of a fixed-term deposit in this environment for a limited period of time was judged to be justifiable by the city treasury.

The city also wants to inform about the development in a press conference this Tuesday.

Source: merkur

All news articles on 2021-03-09

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