The Hypo Real Estate Collapse in Germany

It is a truly sad state of affairs that a failed market operation by a Dublin bank can effectively collapse one of the biggest banks in Germany without anyone noticing in Ireland, they surely did in Germany :frowning: … fd18c.html



Now read the FT

Spoke to a German workmate of mine this morning who has just returned from there from holiday. Apparently the German media has blamed the Irish section of Hypo for all its trouble’s. Apparently this does not deserve a mention in Ireland

Our media is not interested in this at all.

**This is the third LARGE German bank to collapse because of shenanigans involving an arm in Dublin **

The THREE largest bank collapses in Germany in recent times ( 2007/2008) all came with a dodgy Dublin connection somewhere in the mix .

So companies were locating in the IFSC to benefit from the “imaginative” Irish approach to finance or the “imaginative” Irish approach to regulation? … /0200a.htm

We specialise in all sorts of shenanigans, not just banking: Interesting article from 2005 arround the time the IFSC was christened ‘the financial wild west’.

The “imaginative” regulation …meaning that Ireland does not regulate because that would imply that we care.

The ISE and FinReg / Ifsra and the Central Bank and indeed the Accountancy Profession have all caught a bad dose of " The Comreg Disease " .

Look at how dodgy and expensive taxis are since we got a Taxi Regulator in the past 2 years .

In Ireland you set up a sectoral regulator quango to keep Europe off your back .

You have to wonder why the Germans bailed out this crowd. Still, it doesn’t stop them bringing the full force of the law to investigate the white collar criminals. What are the chances of that happening here?

HRE is quite big, and it failling over was/is seen as a systemic risk. Depfa has almost half a trillion of assets, and financing many communities, countries, cities, etc.
At the end, the business model they run wasn’t sustainable in the current market situation - financing long-term loans with short-terms business only works as long as you hve someone lending you the short term money. And as we all know, no (short-term) money available.

Very unfortunate for HRE, as they only merged their own IFSC-based HPFB (Hypo public finance bank) with Depfa end of last year (or beginning of this year). However, someone had f**cked up big time when assessing Depfa’s assets. HRE paid 5 billion for Depfa, and in third quarter this here it caused 2.5 billion loss…

The main reason why all this probably wasn’t mentioned in the news here too much is that Depfa is practically doing noon business in Ireland or has any Irish clients.

I know quite a few people working in depfa/hre here in Dublin - they have to deal with the German as well as Irish financial regulator and they pretty much say that the Irish regulator is more than useless…

A close family member who works for them here says the Germans knew or should have well known what was going on. They did a Madoff on it.

It’s hard to imagine anyone buying an operation like Depfa in the current environment.

Good post from Ed Harrison on HRE as it finally seems to be reaching a conclusion: … erman.html

I would say the bailout is similar to what we are seeing with systemically important institutions in every single Western country (Fortis in the Benelux, RBS in the UK, Citigroup in the US, Anglo Irish in Ireland).
Fixed that for you Ed 8)

Fixed that for you Ozzy…