German bank KfW faces an investigation after officials discovered that it threw away €300 million in a transfer to Lehman Brothers - hours before the failing American firm collapsed.
KfW made the massive transfer on Monday morning, after a tumultuous weekend for Lehman Brothers, a major investment bank, which declared bankruptcy shortly afterwards.
The bank’s new head, Ulrich Schroder, who has only been in office for 18 days, is already being blamed for the costly mistake by outraged German officials.
How could such a costly and wasteful mistake be allowed to happen?
KfW spokesman Michael Helbig explained that bank computers automatically transferred the €300million to Lehman Brothers - yet nobody at KfW caught the error.
The issue was not even noted at an internal meeting KfW had held the previous Friday in order to discuss possible strategies in case of a Lehman Brothers collapse. The spokesman said: “The problem was not noticed. We are now investigating why the transfer was not stopped.”
German officials are furious, as the state-owned bank’s mistake is likely to cost the government. German Finance Minister Peer Steinbruck (Social Democratic Party) has already threatened the KfW with consequences, and his spokesman Torsten Albig labelled the incident as “baffling” and “annoying”.
The Finance Ministry in Berlin has planned an inquiry to find exactly who is to blame.
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