D.he German financial regulator Bafin filed for bankruptcy on Monday evening for Greensill Bank, which had run into turmoil. This was announced by a spokeswoman for the Bremen District Court on Tuesday morning on request. The application is now being examined. It was initially unclear whether there would be a decision on Tuesday. The court wants to inform about the further course.
Bafin had already closed the Bremen subsidiary of the British-Australian financial conglomerate Greensill to customer traffic at the beginning of March. The public prosecutor’s office is investigating Greensill Bank, the Bafin had filed a criminal complaint. According to reports, it is about the accusation of falsification of accounts.
Decision on compensation case will be made shortly
The Bafin expects a decision on the Greensill Bank in Bremen, which it has closed, shortly. “The legal prerequisites for compensation exist when BaFin determines that Greensill Bank has received compensation in the next step. That decision is imminent, “the agency wrote in the March issue of its monthly journal, which was published on Monday. BaFin closed the institute at the beginning of March due to the threat of over-indebtedness. So far it has never happened that an institute has been permanently active on the market again after a moratorium.
The compensation fund of the private banks steps in for the deposits of private customers. However, since October 2017, the funds of professional investors such as federal, state, municipal or bank-like customers are no longer subject to the compensation scheme. According to insiders, these customers are about 500 million euros on fire. The Association of Private Banks BdB has communicated that the funds of professional investors are no longer protected and this has also been made clear in the specialist press for treasurers, explained the BaFin. She defends herself against criticism for not having pointed out the problems at Greensill Bank earlier. It is forbidden by law to provide information about special audits or other regulatory measures.
According to the Federal Ministry of Finance, to which the Bafin is subordinate, the authority has had the Bremen money house in its sights for over two years. At the beginning of 2021, she appointed a special representative there. Since January 2019, she has been informed monthly about balance sheet data from the bank, according to a response from the ministry to the Green finance politician Lisa Paus.
The authority ran after the events in the crucial phase, criticized Paus. “She has been regularly informed since 2019, but not intervened,” said Paus of a news agency. “The supervision must be just as dynamic as the financial market and the development in the banks.” The Bafin had already been accused of having acted too late and too timidly in connection with the billions in Wirecard balance sheet fraud.
Greensill Bank is dependent on the British-Australian finance company Greensill Capital, which has gone bankrupt. Over the past few years, the company has raised billions in money from savers through its bank subsidiary in Bremen, with which transactions in supply chain financing have been secured. BaFin also reported those responsible at the bank to the Bremen public prosecutor’s office, as the institute was sometimes unable to provide any evidence for claims in the balance sheet.
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