[A-List] Germany & the imperialist chain: financial sector

["Michael Keaney" <michael.keaney@xxxxxx>]

"A leaked email from Merrill Lynch to Standard & Poor's"... hmmm... it's not
as if ML didn't have its own much better publicised troubles. Months ago
Will Hutton wrote an Observer column in which he railed against the power of
the US ratings agencies to disadvantage non-US firms. He suggested that
there should be the formation of some European equivalent. Perhaps the
Japanese would be interested in collaborating in such a venture.


Hunt is on for bank saboteur

'Manipulation' of Commerzbank shares under investigation

Heather Stewart and John Hooper in Berlin
Friday October 11, 2002
The Guardian

A plot to "sabotage" the share price of Commerzbank is being investigated by
financial watchdogs, Germany's third biggest listed bank said yesterday. The
news helped the shares close 16% higher in Frankfurt.

As chief executive Klaus-Peter Müller sought to reassure the markets about
its solvency, the bank announced that the federal financial supervisory
authority (BAFin) had "launched an initial investigation into possible
market manipulation of the Commerzbank share".

In a statement, the bank said: "There are suspicions that an external party
is attempting to sabotage the share price by spreading negative rumours."

Shares in Commerzbank fell to 20-year lows earlier this week after Standard
& Poor's downgraded its credit rating to A- from A. Rumours had begun
circulating after a leaked email to Standard & Poor's from Merrill Lynch
questioned the bank's financial health.

The supervisory authority said its investigation had been triggered by a
report in a German financial journal that Commerzbank had had to seek
permission from the regulator for new loans.

In a statement issued later, BAFin's vice-president, Karl-Burkhard Caspari,
said: "Anybody who wilfully circulates incorrect rumours must reckon with
investigations into suspected market manipulation." A spokeswoman added:
"This is far more than a routine investigation."

With the bank due to release its quarterly figures on November 12, Mr Müller
tried to calm market nerves by telling German newspaper Handelsblatt: "The
third quarter figures are not bad in the light of the catastrophic state of
the financial markets."

He said Commerzbank's finances had been boosted by the $712m (£450m) sale of
the mortgage bank, Rheinhyp. It previously announced a review of investment
banking operations. It is thought to be considering shutting parts of the
operation and laying off staff - in addition to 4,300 job losses already
announced - in an attempt to cut costs by 10% next year. "We're ahead of
plan in our cost cutting, we will finish this year probably better than we
promised," Mr Müller said.

The crisis of investor confidence in Commerzbank raised fears of a wider
credit crunch among German banks - but Mr Caspari insisted yesterday that
such fears were unfounded. "The current exaggeration in the market,
especially the prevailing doubt about the liquidity of German institutions,
is entirely beyond my comprehension," he said.

Wim Duisenberg, president of the European central bank, joined the chorus of
soothing voices. "The impact on stock prices has been rather dramatic but,
generally speaking, the banks and financial institutions can weather the
storm very well because of their sound, robust underlying positions."