German bankers in dock over rescued bank HRE

AFP, MUNICH: Two former executives of the bank that was Germany's biggest casualty of the 2008-2009 financial crisis went on trial Monday for their alleged role in the institution's troubles.
Georg Funke, the former chief executive of Hypo Real Estate (HRE), and former chief financial officer Markus Fell were in the dock of the regional court in the southern city of Munich accused of covering up the bank's woes at the height of the crisis.
Funke was sacked from the later nationalised HRE in late 2008. He and Fell, who is also accused of stock price manipulation, face up to three years in prison as well as fines.
Both deny the charges.
HRE got into trouble after the failure of US investment bank Lehman Brothers in September 2008 exacerbated cash-flow problems at HRE's Irish unit Depfa Bank.
During the crisis, Chancellor Angela Merkel's government desperately cobbled together the state-led rescue of the mortgage lender worth more than 100 billion euros ($108 billion) to prevent its collapse from triggering a chain reaction throughout the entire German banking system.

Many former shareholders lost heavily in the collapse of HRE. It returned to profit in 2011 after its holdings of Greek debt were transferred to a so-called "bad bank".
The Munich halted proceedings against six further former HRE executives following the payment of fines.

German bankers in dock over rescued bank HRE

AFP, MUNICH: Two former executives of the bank that was Germanys biggest casualty of the 2008-2009 financial crisis went on trial Monday for their alleged role in the institutions troubles. Georg Funke, the former chief executive of Hypo Real Estate (HRE), and former chief financial officer Markus Fell were in the dock of the regional court in the southern city of Munich accused of covering up the banks woes at the height of the crisis. Funke was sacked from the later nationalised HRE in late 2008. He and Fell, who is also accused of stock price manipulation, face up to three years in prison as well as fines. Both deny the charges. HRE got into trouble after the failure of US investment bank Lehman Brothers in September 2008 exacerbated cash-flow problems at HREs Irish unit Depfa Bank. During the crisis, Chancellor Angela Merkels government desperately cobbled together the state-led rescue of the mortgage lender worth more than 100 billion euros ($108 billion) to prevent its collapse from triggering a chain reaction throughout the entire German banking system. Many former shareholders lost heavily in the collapse of HRE. It returned to profit in 2011 after its holdings of Greek debt were transferred to a so-called bad bank. The Munich halted proceedings against six further former HRE executives following the payment of fines.