West LB contests Fitch downgrade
DÜSSELDORF - State-owned German bank West LB is considering suing rating agency Fitch Ratings after it downgraded the bank's individual rating from D/E to F owing to claims the bank would have been bankrupt without state aid.
West LB has announced it is likely to suffer a full-year loss of €1 billion for 2007, due to subprime exposures. The bank claimed Fitch's rating was without basis and lacked any knowledge of the relevant internal information. West LB's owners recently agreed to provide €2 billion in capital to the bank.
Fitch has continued to rate WestLB even without mandate from the bank, claiming strong investor interest. Rival rating agency Moody's - which has a contractual relationship with the German bank - claims West LB has a satisfactory liquidity level.
WestLB recently publicised merger plans with Landesbank Hessen-Thüringen, which would form Germany's largest state-owned bank. The German state of North Rhine-Westphalia owns about 38% of West LB, while the Westphalia-Lippe and Rhineland savings banks associations collectively control over 50%.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Market doesn’t share FSB concerns over basis trade
Industry warns tougher haircut regulation could restrict market capacity as debt issuance rises
FCMs warn of regulatory gaps in crypto clearing
CFTC request for comment uncovers concerns over customer protection and unchecked advertising
UK clearing houses face tougher capital regime than EU peers
Ice resists BoE plan to move second skin in the game higher up capital stack, but members approve
ECB seeks capital clarity on Spire repacks
Dealers split between counterparty credit risk and market risk frameworks for repack RWAs
FSB chief defends global non-bank regulation drive
Schindler slams ‘misconception’ that regulators intend to impose standardised bank-like rules
Fed fractures post-SVB consensus on emergency liquidity
New supervisory principles support FHLB funding over discount window preparedness
Why UPIs could spell goodbye for OTC-Isins
Critics warn UK will miss opportunity to simplify transaction reporting if it spurns UPI
EC’s closing auction plan faces cool reception from markets
Participants say proposal for multiple EU equity closing auctions would split price formation
