Skip to comments.Here's Whats Going On With The Report About Siemens Withdrawing €500 Million From SocGen - ECB
Posted on 09/20/2011 7:14:48 AM PDT by blam
Here's Whats Going On With The Report About Siemens Withdrawing 500 Million From SocGen And Depositing It With The ECB
Sep. 20, 2011, 9:29 AM
There's been a lot of confusion about Siemens fund deposit with the European Central Bank (ECB).
The Financial Times reported that Siemens withdrew more than 500 million from a large French bank two weeks ago and deposited it with the European Central Bank (ECB).
Siemens has since denied the claim and claimed the report was 'factually incorrect'. Instead Siemens is said to have moved an unspecified amount from Societe Generale in mid-July, before results of the European bank stress tests were released.
Unlike the FT report which claimed that the German conglomerate withdrew its funds because of concerns over the health of the bank, sources now claim it was because of the funds' under-performance and had nothing to do with the financial health of banks.
The German conglomerate also wanted to gain from higher interest rates paid by the ECB, according to FT. The ECB paid an average interest rate of 1.01% last week for its one-week deposits compared with an overnight interest rate of 0.95% by eurozone banks.
This alone is a bit of a scandal, since effectively the ECB has policies that are damaging domestic banks.
Last year, Siemens got regulatory approval to launch its own bank which would provide credit during a financial crisis. It was primarily intended to be a support tool for the company but also aimed to offer up to 2 billion in loans to renewable energy and healthcare companies. This bank gave Siemens access to reach out to the ECB for liquidity, and to deposit cash with them as well.
(Excerpt) Read more at businessinsider.com ...