Bank Shake-Up in Germany?
Sengera's June 23 resignation as CEO of Westdeutsche Landesbank, which is 43.2% owned by the State of North Rhine-Westphalia, could spur far-reaching change among Germany's bloated public-sector banks. Sengera, who quit after Germany's financial watchdog criticized WestLB's risk-management procedures, wanted to transform the bank into a full-fledged commercial institution capable of competing on equal terms with private-sector counterparts. But his efforts ran into trouble when its London-based principal-finance unit, which takes stakes in companies and finances its investments by securitizing their revenue flows, made a series of hazardous deals that look likely to turn sour. Bankers say WestLB's blunder will put new pressure on the 11 Landesbanken to merge or be sold off.