Saturday, May 29, 2010

Top German Bankers See Plot To Funnel Bailout Money To French Banks

German Logo of the ECB.

Image via Wikipedia

Joe Weisenthal

From the beginning, it's been clear that the bailout of Greece would be a bailout in large part of French banks, owing in part to the fact that French banks had the biggest exposure.

Yet apparently some top German bankers are alarmed at how things are playing out.

A report in Der Spiegel (in German) suggests that top Bundesbank bankers see a "plot" underway at the ECB.

From Google Translate

Germany's top bankers are confused: € 25 billion, the ECB has so far spent on Greek government bonds. According to SPIEGEL information suggested the Bundesbank, that is served chiefly to Paris - so French Institute could get rid of their scrap paper.

Here's what they're upset about: The ECB is buying up Greek debt (largely from French banks), but the Germans don't understand why. After all, Greece has already received its bailout money already ; Greece should be able to pay back its debt in full.

Why, then, do French banks need to offload its junk paper?

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