German bank losses prompt IFSC raid

Wednesday 13 August 2008 15.50
IFSC - Sachsen Bank offices raided
IFSC - Sachsen Bank offices raided

The offices of a German bank were raided yesterday at the IFSC in Dublin.

Gardaí were investigating how a German bank almost collapsed on the back of investments made at its Irish operations.

The examination of Sachsen's businesses started last October, after the bank was bailed out of trouble and bought for €300m.

Sachsen was sold at a knock-down price after running into multi-billion euro liquidity problems.

There are concerns that the bank was exposed to bad loans connected to the US sub-prime mortgage market.

This time last year, when the credit crunch hit, the funds Sachsen based in Dublin's International Financial Services Centre could not handle the debts being called in, so other German banks had to come to its aid with a €17bn rescue package.

The whole bank ended up being sold at the knock-down price of €300m to the Landesbank Baden-Württemberg or LBBW last December.

28 sites, including houses and offices in six German states, were searched yesterday by German police and gardaí, who collected computers, electronic data and documents in Dublin.

Last night a spokesperson for the Irish Financial Regulator said it was aware of the raids and was satisfied that Sachsen's Irish staff is co-operating fully with the ongoing investigation.