SoFFin

The Financial Market Stabilisation Fund ( FMS, also Special Fund for Financial Market Stabilization, SoFFin) is an extra budget and was established on 17 October 2008 under the German Financial Market Stabilisation Act, which was passed in an emergency procedure on the same day of the Bundestag and the Bundesrat and signed by the Federal President. The ordinance of this law was passed by the Federal Cabinet on 20 October. The Special Fund awarded first since January 1, 2011, no new loans to financial institutions more. He was reactivated in January 2012 limited until the end of 2012. In October 2012, the Federal Government ( Germany ) approved a further extension until the end of 2014, which should be regulated by law in a Third Financial Market Stabilization Act. The banks should be even more involved in the costs. Since July 2011, Christopher Pleister is the spokesperson of the Executive Committee.

Facility

The furnished by the Financial Market Stabilization Act Financial Market Stabilisation Agency ( FMSA ) manages the fund.

The fund was formed in the shape of a fund, the federal government and therefore not subject to the usual rules of budgeting. 65 percent of the costs (or losses) are paid by the federal government and 35 percent, but a maximum of 7.7 billion euros from the German states. The fund was originally limited to 31 December 2009. The fund has a volume of 480 billion euros. First, the FMSA was allowed on the Fund loans of up to 70 billion euros for the purchase of toxic assets and recapitalize ( participation) record of financial institutions. About further loans amounting to tens of billions of euros may be disposed of with the consent of the Budget Committee of the German Bundestag for the same purpose. In addition, the Federal Ministry of Finance is empowered to borrow another 20 billion euros in order claims resulting from guarantees to satisfy: The FMSA is authorized for issued up to 31 December 2009, debt securities and liabilities of beneficiary companies guarantees up to a pronounce totaling 400 billion euros. The warranties are limited to 36 months. As of 2011, the Fund is no longer active stabilizing active, already made stabilization measures will only be managed and monitored to ensure that associated conditions are complied with the measures.

Beneficiaries are:

• Institutions within the meaning of § 1 paragraph 1 b of the Banking Act ( credit institutions and financial services institutions ),
• Insurance companies and pension funds within the meaning of § 1 para 1 no 1 and 2 of the VAG,
• Investment companies within the meaning of the Investment Act;
• Operators of securities and futures exchanges

And their parent company. The aids only apply to companies established in national territory. The seat of the SoFFin is in Frankfurt am Main, Taunus Appendix 6 The SoFFin directs the speaker of the Steering Committee, the staff are under 23. Following the resignation of Günther Merl took over on 3 February 2009 the banker Hannes Rehm this office. It has also been appointed to the Steering Committee Christopher Pleister by the Bundestag. Pleister succeeds by Karlheinz Bentele, who had left the Steering Committee before the end of 2008. Together with Gerhard Stratthaus (until 2011 ), making it the three-member management committee again be complete.

The applications of the Financial Market Stabilisation Fund be decided in Berlin by an appointed steering committee. This committee included 2008/2009 Jens Weidmann by the Federal Chancellery, Axel Nawrath as State Secretary in the Federal Ministry of Finance, Walther Otremba as State Secretary in the Federal Ministry of Economics and Technology, and a representative of the countries.

The financial market stabilization fund is overseen by nine members of the German Bundestag. Decisions or reject but can not change the parliamentarians. The nine members of this committee are:

• Florian Toncar (FDP, Chairman)
• Bartholomew calf (CSU, Vice-Chairman )
• Klaus -Peter Flosbach (CDU )
• Ralph Brinkhaus (CDU )
• Georg Schirmbeck (CDU )
• Carsten Schneider ( SPD)
• Carsten Sieling (SPD )
• Roland Claus (The Left )
• Gerhard Schick ( Alliance 90/The Greens )

Originally, these were:

• Florian Toncar (FDP, Chairman)
• Bartholomew calf (CSU, Vice-Chairman )
• Leo Dautzenberg (CDU )
• Ralph Brinkhaus (CDU )
• Georg Schirmbeck (CDU )
• Carsten Schneider ( SPD)
• Carsten Sieling (SPD )
• Roland Claus (The Left )
• Alexander Bonde ( Alliance 90/The Greens )

The control committee began about November 2008 its activities and meets once a week at the meeting in a closed-off, bug-proof room where the representatives of the Financial Market Stabilisation Fund and the Federal Ministry of Finance must give the members information. The survey and the statements made there are secret. The banks, however, are legally required to publish decisions of the Financial Market Stabilization Fund, which may impact on the share price on the stock exchange. This publication could affect support of equity or guarantees from the fund to bail out the banks.

The secret weekly meetings and financial committee of the Bundestag is usually informed after the fact of such support operations.

Expected function and resolution

The Fund may provide up to 400 billion euros in guarantees to the banks. These guarantees do not actually lead to government payments, if they are not taken advantage of. The federal government has five percent, or 20 billion euros, as a precaution, ultimately resulting burden on the budget set. There would also services for the recapitalization of the banks and the assumption of risk for problematic loans exceeding 80 billion euros. Overall, as a volume of the fund of 100 billion euros, which would be applied by the state. Institutions must pay a " competitive wages " ( for-sale consideration, eg equities) or " reasonable return " to the fund in return. Commerzbank AG, for example, pays the silent participation of the Fund an interest rate of 9 % per annum, the Hypo Real Estate has issued guarantees for the fund for its bonds an annual commission of 1.5 %, as well as the not yet undrawn portion of the guarantee facility to pay a commission of 0.1 % per year.

According to a constitutional complaint against the Financial Market Stabilization Act, however, does not contain a provision which governs the reimbursement of grant to the state.

" For the success of the rescue package, it is necessary that the new Special Fund for Financial Market Stabilization ( SoFFin) features in the coming weeks and months about a compelling and comprehensible concept for a sustainable financial system ," said the opinion of the Economic Advisers 2008. It 'm here on out on the one hand not to save all banks, but only those with a successful business model; other hand, the state should not interfere in the daily operations of the banks. After successful stabilization and restructuring of the banking system, the state should retreat back to its core tasks.

Performance and utilization

The Financial Market Stabilization Authority, which is supported by the Deutsche Bundesbank technical, organizational and technical banking, does not publish information on companies, which applications have provided to support the SoFFin. The Minister of Finance said in a statement on 21 November 2008, a " double-digit number of companies" which befänden is " on the way " to help SoFFin. So far, information on vulnerable companies and details of the applications may be taken only of the press. These known procedures are summarized in the table below.

On 11 February 2009, the guarantee limit for the Hypo Real Estate was increased by a further 10 billion euros to 52 billion euros. Along with the cash injection over 50 billion euros in mid-November 2008, the Hypo Real Estate has thus a total of 102 billion euros in aid and guarantees received (of which 87 billion euros from the state and 15 billion from other banks).

Economic Success

Until 31 December 2012 thus a cumulative loss of € 21.5 billion was generated.

Development

On 3 November 2008, Commerzbank announced that she would receive a silent participation of EUR 8.2 billion euros from the Special Fund for Financial Market Stabilization. The deposit must bear interest at 9 percent. This deposit will be credited 100% of the core capital. In addition, the SoFFin the Commerzbank Group premises as an option a guarantee for debt securities of EUR 15 billion. ( See also: # Commerzbank, Dresdner Bank takeover ) Landesbank Baden- Württemberg thinks press releases also considering using the services from the bailout of the federal government. Even in the ranks of Postbank and Deutsche Bank will apparently discussed about the use of aid. Representative of the German banking industry have for a crisis meeting at the chancellery in December 2008 stimulated the activities of Soffin toward the buyout problematic risk-weighted assets of German banks to expand. The banking supervisory authority ( BaFin ) leads to the purpose of the risk assessment of individual institutions a list of which end of April 2009 apparently by an internal leak has come to the public.

Stand Special Funds: In early May 2009

Until April 9, 2009 applications for stabilization aids in the amount of 212 billion euros gestellt.Bis beginning of May 2009 has been promised by this request total 152 billion euros to the applicants. Of this sum were granted 133 billion euros in guarantees. The remaining 19 billion euros were awarded in support of the equity of the applicant.

Furthermore, were another twenty Requests in the form of preliminary inquiries. The number of eighteen applications has not changed since February 2009. As justification for the number of requests is given by stagnant since the Soffin that the number of interested institutions would not change significantly.

As of July 2009

Hannes Rehm, the spokesman of the Executive Committee of the Financial Market Stabilization Fund, said that so far guarantees in the amount of 143 billion euros and capital assistance in the amount of 24.5 billion euros were granted. There have been even 23 yet approved applications to the guarantees in the amount of 65 billion euros.

As of October 2009

The volume of applications to stabilization aids by the Financial Market Stabilisation Fund was October 8, 2009 as of € 232.9 billion. The volume of contracts signed for stabilization aids amounted to € 155.6 billion, of which € 127.7 billion attributable to the provision of guarantees, € 21.9 billion to the award of equity and € 5.9 billion on the assumption of risk.

As of December 2009

The ( adjusted for extensions ) application volume on stabilization aids in the stabilization fund was level 8 December 2009, € 238.2 billion. The volume of contracts signed for stabilization aids amounted to € 148.6 billion, of which € 117.7 billion attributable to the provision of guarantees, € 25.0 billion to the award of equity and € 5.9 billion on the assumption of risk.

In addition, two preliminary inquiries were available in the stabilization fund. 25 companies have so far submitted applications.

According to the Federal Ministry of Finance a new borrowing by the Financial Market Stabilisation Fund of a total of 26.6 billion euros were needed to stabilize the financial markets in 2009. Until 31 December 2009, eight banks and the German banks Sicherungseinrichtungsgesellschaft mbH were promised guarantees totaling 160.7 billion euros, provided recapitalizations totaling 28 billion euros available for the benefit of four banks and set up a Abwicklungsanstalt.

Of April and May 2010

The volume of applications to help stabilize the financial market stabilization fund amounted to 219.3 billion as of April 30, 2010 EUR. 26 companies have so far submitted applications. The volume of signed stabilization aids is 172.5 billion euros in capital and guarantee measures. For 2009, the Fund recorded a loss of 4.26 billion euros.

The volume of corporate actions SoFFin was at 30 April 2010 28 billion euros.

• Commerzbank: EUR 18.2 billion
• HRE: 6.3 billion Euros
• WestLB: 3.0 billion Euros
• Aareal Bank: 0.5 billion euros.

Volume of SoFFin guarantees April 30, 2010: € 144.5 billion

• Aareal Bank AG: 4.0 billion Euros
• BayernLB: 5.0 billion Euros
• Commerzbank AG: 5.0 billion Euros
• Corealcredit Bank AG: EUR 0.5 billion
• German Pfandbrief Bank AG ( HRE): 95 billion euros
• Düsseldorf Mortgage Bank AG: 1.3 billion Euros
• HSH Nordbank AG: 17 billion euros
• IKB German Industrial Bank: 10.0 billion euros
• Sicherungseinrichtungsgesellschaft German banks mbH: 6.7 billion euros.

As of September 2010

A further 40 billion euros have been requested on 10 September 2010 as a guarantee of the HRE to avert a looming bankruptcy September 22, 2010 no later than 30 September 2010.

As of March 2011

For the 3 March 2011, the fund provides a total volume of retrieved resources of 69.39 billion euros.

January and February 2012

The German Bundestag and the Bundesrat consent to the temporary end of 2012 reactivation of Finanzmarktstabilisierunsgfonds to (Second Financial Market Stabilisation Act ). He can come to the assistance wobbling banks with capital injections of up to 80 billion euros and with guarantees of up to 420 billion euros.

September 2012

Until 28 September 2012, the SoFFin liquidity guarantees, which had peaked in 2010 with 168 billion euros to 5.2 billion and capital assistance, which had reached 29.4 billion in 2010, to 18.8 billion decrease.

Granted guarantee framework billion euros (Total: 5.2 )

• Sicherungseinrichtungsgesellschaft German banks mbH 2.2
• Düsseldorf Mortgage Bank AG 1.5
• IKB German Industrial Bank AG 1.5

Capital measures billion euros (Total: 18.8 )

• Hypo Real Estate Holding AG 9.8
• Commerzbank AG 6.7
• Portigon AG 2.0
• Aareal Bank AG 0.3

December 2012

Since its foundation in 2008, the Fund has made ​​a total of 23 billion euro losses.

2013

On January 1, 2013, the Third Financial Market Stabilization Act into force, which extends beyond 2012 until the end of 2014 measures under the Financial Market Stabilisation Fund Act, opening the financial market stabilization fund for new requests entered.

On December 13, 2013 reduced its liquidity guarantee to the financial market stabilization fund as the last of the original nine banks Düsseldorf Mortgage Bank AG. Furthermore, banks are supported with equity support of around 17.1 billion euros. These are the Hypo Real Estate with 9.8 billion euros, Commerzbank with 5.1 billion euros, 2.0 billion euros and Portigon with Aareal Bank with 300 million euros, as at 30 November 2013.

External consultant contracts

The bank rescue fund has spent nearly 100 million euros for external consultants between autumn 2008 and the end of 2012. This is clear from the response of the Federal Ministry of Finance forth to a request from Klaus Ernst (The Left ). The advisory firms were Goldman Sachs, Credit Suisse, German Bank, McKinsey, Freshfields Bruckhaus Deringer and Ernst & Young.