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Old 09-17-2008, 04:19 PM   #4
Sun/AC_Scorpio
Avalon Senior Member
 
Join Date: Sep 2008
Location: Germany
Posts: 6
Default Re: Financial crash: what can happens in Germany?

Well in my opinion there are a lot of thinks that can happen here in Germany.
Just take the banks as example... the bankruptcy of Lehman Brothers is also threatening the failure-fund for the banks here in Germany.
The failure-fund was founded to guarantee the money of the ordinary people until 20.000 € in the case of a bank failure.
This failure-fund covers 4,5 billion Euro, but only the bankruptcy of a
subsidiary company(Tochterfirma in German) of Lehman Brothers caused a loss of about 500 Million €. Just imagine what will happen, when some real huge banks (like Deutsche Bank or Commerzbank) are getting into trouble.
If you just look on the balance sheet of the Deutsche Bank you can clearly see, that their own Equity is on a really low level (about 3%), normally a bank should have about 8%. And if you also think about the manipulation in the balance sheets and what is considered as real assets (CDO,ABS etc.) then you can get only draw the conclusion, that many banks are bankrupt already.

In the moment, when the ordinary people realize, that their money isn't save on the banks, then you have a classical bank run and this causes a major problem for the financial system also in Germany. What will happen then?
I suppose the government will bail out these banks as well and that will cause more debt for the government, what means more inflation and also more taxes for the people in Germany. That is only one point of much more ....

Greetings
Scorpio

Last edited by Sun/AC_Scorpio; 09-17-2008 at 04:44 PM.
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