Austrian Times RSS FeedsLike the Austrian Times Facebook page!Follow us on Twitter!


Events for November
M T W T F S S
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
Add your event FREE

Today

Videos


BurgKino

Pub Quiz everyTuesday at Johnny's Pub

Popular in Austria


Cosmo&Nanu

Bad bank solution for Hypo Alpe Adria

Austria's national bank governor (OeNB) Ewald Nowotny has come out in favour of a "Bad Bank" model to solve the problems of the Hypo Alpe Adria (HGAA) bank.

The bank in Carinthia was at the centre of a scandal after it was revealed that it had been involved in a number of questionable activities including making bad loans using asset-backed securities particularly in Eastern Europe. But it had also been closely connected to the then regional governor Jorg Haider who had allegedly encourage the bank to make bad business decisions in order to support him politically.

Bad bank is a term for a financial institution created to hold non-performing assets owned by a state guaranteed bank. Such institutions have been created to address challenges arising during an economic credit crunch where private banks are allowed to take problem assets off their books.

In the case of Hypo Alpe Adria it is alleged that the bank's financial situation had been disguised in order to sell it  May 2007 to the German BayernLB bank. But after pumping in hundreds of millions in order to stabilise the bank the Germans were forced to sell it back to the Austrian government to prevent a bank collapse.

The financial crisis of 2007–2010 resulted in bad banks being set up to handle the crisis in a variety of countries. For example, a bad bank was suggested as part of the Emergency Economic Stabilization Act of 2008 to help address the subprime mortgage crisis in the US. In Ireland, a bad bank, the National Asset Management Agency was established in 2009, in response to the financial crisis in that country. In 2010 the UK government established UK Asset Resolution, a state owned limited company to manage the assets of the two bankrupt nationalised mortgage lenders Bradford & Bingley and Northern Rock (Asset Management). This Bad Bank is responsible for managing £77bn of assets.

Since buying back the bank the Austrian government has been looking for a solution to get the problem of their books and according to Nowotny he believes that the bad bank idea would be the best option.

He said: "with the idea of using a bad bank model there are a number of possibilities available, it simply a question of seeing which one suits this situation best. At the end of the day though the government has to decide what the best way forward is."

No amount was given on how much money would be lodged with the bad bank but it was revealed last week that the Hypo Alpe Adria in order to balance its books needed more state money.

This year alone is likely to be €2 billion to cover further losses in bad credits made in the Balkans.

The biggest problem at the moment is that officials in Vienna and in Klagenfurt have fixed up a timetable that would involve selling the Balkans bank in the middle of 2015 – which officials in Brussels already said it is far too long.

Austrian Times


Are you on Facebook? Like the Austrian Times on Facebook and win great prizes!


Cosmo and Nanu
ORF Watch

Tag cloud:
financial  crisis  problems  Hypo  Nowotny  Adria  German  Management  Austria  money  Alpe  books  mortgage  solution  Asset  bank  institution  asset  governor  government

Latest News

 

Mad About Mammoths At Vienna Museum
A unique exhibition in the Austrian capital Vienna has proved a massive hit after bringing together for the first time some of the most famous frozen woolly mammoth remains.

Controversy Over Advert For Fucking Hell Beer
An Austrian political party has defended a decision to promote a local beer named after the village of Fucking.

Luigi Restaurant Cooks Up Delicious Delights For Winter Season
Brothers Luigi and Leo Doci who own the renowned Luigi restaurant chain will be cooking up a storm in Semmering this winter.

Church Porn Star In Court
A Polish-born woman who made a video of herself masturbating in church is facing six months in jail after a viewer called police when he recognised the woman.

Hugh Grant Cuddles Lamb On Animal Farm With Mrs Glock
Hugh Grant led a star-studded turnout at Austria's animal farm project which unveiled its Christmas market this week.

Cheating Wife Buries Hubby Alive For New Lover
A woman who married her sisterís fiance and then attacked him with a knife before burying him alive so she could be with her new lover is facing life in jail.

Spate of Crimes throughout Vienna and Lower Austria Solved
Four men have been arrested after committing 113 break-ins, 21 thefts and causing at least 260,000 Euros worth of damage.

Dad Punished Child, 2, With Boiling Hot Shower
A two-year-old girl is in an artificial coma and fighting for her life after her father threw her into a scalding hot shower leaving her with severe burns at the family home in the Austrian capital Vienna.

Police And Firemen Get Cold Turkey
Flipping the bird was given a new meaning in Austria this week when a truck filled with plucked turkeys overturned, closing a busy motorway in the process.

Hotel Gets A Penthouse Without The Building Stress
A hotel in the southern Austrian city of Graz has gone upmarket with a five-star penthouse suite by simply having it lifted by a crane onto the top floor.

 


Mala Vrata

The most popular stories –
last 7 days



Don't moan alone, the Ombudsman Investigates.

Why suffer in silence. Let off steam by letting our readers share your troubles. File your complaints about anything and everything here.

Our ombudsman David Rogers will try and help solve some of the problems from lazy civil servants through to incompetent companies – and at the very least the worst transgressors will end up in our weekly special report.


Austrian Zimmers