Sunday, November 09, 2008

The weapon "money"

See generally: PLANET MONEY , on NPR

Irish Bank's Rapid Global Growth Bought Trouble
by Adam Davidson

Depfa was one of those immigrants, arriving six years ago. Before that, Depfa was a German bank — a really German bank. It was owned by the German government. Its core business was German government bonds.


In 2000, Depfa made the move that brought the bank in contact with the Wisconsin school boards. It opened an office in New York with a ridiculously audacious goal: to dominate American municipal finance.


By September, it was about to collapse — right when the government of Ireland promised to bail out any troubled Irish banks. But Depfa learned that even a bank could get treated as harshly as an immigrant. The government told bank officers Depfa was too big to save.


In the end, Depfa was saved — sort of — in a blanket bailout by the German government. Bruckermann had persuaded Hypo Real Estate, one of Germany's largest lenders, to buy the bank in 2007.