WestLB gets Saved
May 1, 2008 – 10:35 amYesterday it was the EU reaching down to lift up yet another ailing German bank. WestLB structured investment portfolio is valued at 23 billion euro ($35.8 billion), which include exposures to the U.S. subprime real estate loans. So, no one really knows what it’s worth, but at least the EU will gaurantee the lions share leaving the German taxpayer on the hook for a possible 5 billion euros.
The local government has said it will cover up to 5 billion euros in losses from risky investments made by WestLB.
The Comission went out of it’s way to say
“Strict conditions ensure that the aid is limited in time and reversible. The approval of the rescue aid does not prejudice the Commission’s assessment of the restructuring plan Germany has committed to submit by 8th August 2008,” the Commission said in a statement.
Strict I’m sure, but we don’t expect to see WestLB reversing the flow anytime soon.
