The municipality of Pöcking, together with 25 other municipalities, is trying to get their money from the Greensill Bank.
The bank has now filed for bankruptcy.
In Pöcking it's about five million.
Update from March 17, 2021: Pöcking
- The municipality of Pöcking is cooperating with the other 25 German municipalities that could also become victims of Greensill bankruptcy.
Mayor Rainer Schnitzler announced this yesterday.
The municipalities have invested a total of 255 million euros in the Bremen Institute.
Pöcking is there with five million euros (we reported).
Schnitzler hopes with the association for more assertiveness, be it with the insolvency administrator, be it with the examination of claims.
The municipalities have their sights on the Greensill supervisory board and the auditing company, as well as the brokers and rating agencies - a very large barrel could be opened.
"My hope is that at least part of the money will come back," said Schnitzler.
Two weeks ago, the banking supervisory authority BaFin frozen the Greensill Bank's accounts, and bankruptcy was declared on Monday.
Also on Monday, Schnitzler negotiated with other affected mayors in a video conference.
One is now planning to legally position themselves together for the initiated insolvency proceedings, he said.
Pöcking's mayor is part of the working group that wants to work out details for the next steps.
"The really interesting thing is that large cities with finance departments up to a federal state with ministries are also affected," said Schnitzler.
The Free State of Thuringia is also expected to join the alliance of municipalities.
"Everyone is wondering how to invest taxpayers' money," said Schnitzler.
He again referred to the unanimous Council decision on the investment guidelines.
The CSU had also adopted it, which railed against him on social networks.
The Pöckinger investment guidelines have not yet been objected to by any higher authority.
Original article from March 8, 2020: Pöcking
- The impending insolvency of Greensill Bank in Bremen has implications for the municipality of Pöcking.
The richest community in the Starnberg district has invested a total of five million euros in the bank.
In the worst case, the money could be gone, as Mayor Rainer Schnitzler says.
But it could also be that the community gets at least part of it reimbursed.
"That would be reading a glass ball," says Schnitzler.
In any case, Pöcking currently has no access to the money, the municipality said.
The financial stability of Pöcking is not endangered.
In the fall, a decent chunk of money arrived at the Pöcking community, as Schnitzler said in an interview with Starnberger Merkur.
“We had to invest the money, for that we need the banks.” And that is not so easy, because currently, given the low interest rates, no bank wants money.
It was only on Thursday that a call came from a cooperative bank that there was too much money in the community's account.
As a local authority, a municipality must be particularly careful when investing its money - the banks' deposit protection fund only protects private investments.
The municipality of Pöcking, which, according to a press release, has currently invested a further 74 million euros at various institutes, is paying particular attention (see box).
In the period from October 30, 2020 to December 18, 2020, she invested five tranches of one million euros each with Greensill, at interest rates between 0.1 percent and 0.54 percent and maturities up to May 2023 at the latest. “Greensill Bank was At the time of the fixed-term deposit agreements, according to information from an investment broker with whom we have worked well for many years, with a rating of A- / Scope, ”the message says.
On March 3, the financial supervisory authority BaFin imposed a moratorium on Greensill Bank.
This means that all funds are frozen.
Schnitzler reckons that it will take five or six weeks for BaFin to make a decision on how to proceed.
Presumably the Greensill Bank is not systemically important, that is, the state will not step in with the restructuring.
When BaFin has decided whether the bank should be allowed to continue doing business or have to file for bankruptcy, one can say how things will go on with the Pöckinger millions, according to Schnitzler.
“Experience has shown that even in the event of bankruptcy, the percentage can be in the higher double-digit range.” When Lehman Bank went bankrupt, people were also 100 percent compensated.
“But nobody can know.” And if the bank should be able to continue working, he sees a good chance of getting the whole five million back.
This matter has no impact on the current budget, assures Schnitzler.
He points out that the treasurer responsible for the investment had spread widely.
In the case of the investment at Greensill Bank, he unfortunately exhausted the maximum amount of five million euros approved by the local council.
"With all other banks it is a maximum of two million euros." The municipality has hired a law firm to look after its interests.