German SoFFin chair concern on credit crunch-paper

October 12, 2009

soffin   FRANKFURT, Oct 10 (Reuters) – The chair of Germany’s financial stabilisation fund SoFFin is concerned about a credit crunch for German companies as banks are forced to shore up their capital base to offset potential problem loans.
   “We are very concerned, that because of this there will be a massive credit shortage,” Albert Rupprecht, the chair of SoFFin’s parliamentary committee told German weekly Euro am Sonntag.
   Rupprecht criticised some banks for cutting the size of their balance sheets. As a result banks are unable to extend the amount of credit they made available which means that “some Landesbanken, are not fulfilling their responsibility to society,” Rupprecht told the paper.
   Rupprecht said that so far SoFFin had been profitable for the taxpayer. Of the 480 billion euros in state aid made available, 127 billion had been granted in guarantees and a further 21.9 billion in capital injections, Rupprecht told Euro am Sonntag.
   Rupprecht said he believed that neither Aareal Bank <ARLG.DE> or Commerzbank <CBKG.DE> would default on repaying their capital. 
   It remains to be seen whether the restructuring of Hypo Real Estate <HRXG.DE> succeeds and whether the SoFFin aid of 10 billion euros can be repaid, Rupprecht said.
   ((Reporting by Edward Taylor; Reuters Messaging:; +49 69 7565 1187)) ($1=.6782 Euro)
Saturday, 10 October 2009 13:39:49RTRS [nL028989  ] {C}ENDS

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