KfW to Avoid ECB Oversight in Draft Law Backed by Merkel CabinetTony Czuczka
Germany’s state-owned Kreditanstalt fuer Wiederaufbau development bank will avoid European Central Bank supervision under legal changes backed by Chancellor Angela Merkel’s Cabinet.
Germany’s Bafin financial-market regulator will get oversight of Frankfurt-based KfW in cooperation with the Bundesbank, the German central bank, according to an e-mailed Finance Ministry statement today.
A ban on KfW’s turning over profits to the federal government will remain in force, according to the statement. That’s a reversal from plans by Merkel’s coalition in November to use at least part of the bank’s profit to reduce the budget deficit.
“Also in future, KfW won’t be a normal banking institution” under German law, according to the statement. “There is no change to the ban on distributing profits” under the legislation, it said.