IKB: The Unnecessary Bailout

Not a Portfolio.com Insider?

In This Issue of Condé Nast Portfolio

Home > Views > Blogs > Market Movers > IKB: The Unnecessary Bailout

Your Name

Your Email Address *
Send a copy to me

Recipient's Email Address *

Separate multiple email addresses (max 20) with commas.

Subject *

Message

0/1500

Email Confirmation

Market Movers

by Ryan Avent

Main

Auction-Rate Securities: Not Such a ... Yahoo and the Failed M&A Deals

Feb 14 2008 10:49AM EST

Why is the German government bailing out IKB? It's small, it's not systemically important (although it is politically important, which is probably the key here), and there's all sorts of moral hazard involved in keeping this insolvent bank afloat. Willem Buiter is scathing about the decision, calling it downright illegal.

But Sam Jones notes that if IKB was allowed to fail, that would trigger a guarantee mechanism which would cost German banks €24bn. Maybe the IKB bailout isn't an IKB bailout at all, but rather a bailout of the rest of the German financial system.

See more in

banking

Add Your Comment

Already a Portfolio.com Insider? Sign In

Comments*

Thank you for registering as a Portfolio.com Insider. Your comment has been added.

Create Your Public Profile

Recent Blog Posts

The Times' Rorshach Geithner Story
Apr 27 2009 9:26AM EDT
Sinking Animal Spirits
Apr 27 2009 8:45AM EDT
Counter-cyclical Urban Policy
Apr 26 2009 10:00AM EDT
Be Your Own Counterfeiter
Apr 26 2009 9:36AM EDT
Being Tim Geithner
Apr 25 2009 12:37PM EDT
Notes From a Press Conference Naif
Apr 25 2009 9:41AM EDT
What Good is the News?
Apr 25 2009 8:32AM EDT
Stressful Enough
Apr 24 2009 2:29PM EDT
Not Regretting the Pound
Apr 24 2009 1:09PM EDT
Introducing the New Ford Squeeze
Apr 24 2009 9:47AM EDT
Non-Economic Questions of the Day
Apr 24 2009 9:12AM EDT
The Stress Test Blind Alley
Apr 24 2009 8:36AM EDT
Happy Hour
Apr 23 2009 9:40PM EDT
Recovery Without Rebalancing
Apr 23 2009 6:13PM EDT
The Shape of Your Recession
Apr 23 2009 5:11PM EDT

Links

Also in Portfolio.com

Visit our partner sites

Subscribe to a magazine:

Visit our sister sites:

Quotes delayed 15 minutes for NASDAQ. 20 minutes for NYSE and AMEX. Market Data provided by Interactive Data. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions. Company fundamental data provided by Hemscott. Economic data provided by Econoday. News provided by Comtex. Sec Filings data provided by Edgars. The Wall Street Horizon National Consumer Interest Rate Survey. ©2009 Wall Street Horizon. PMMS Mortgage Data ©2009 Freddie Mac. Mortgage averages are for conforming mortgages with 20% down.