Topic Measures BaFin orders moratorium on Kaupthing Bank hf., German branch
On 9 October 2008, the Federal Financial Supervisory Authority (BaFin) issued a stoppage of disposals and payments for the German branch of Kaupthing Bank hf. BaFin also prohibited the branch from receiving payments not intended for payment of debts towards it (“moratorium”).
As the reason for the moratorium, BaFin stated that it had to be ordered to secure the branch’s still remaining assets. The parent company, Kaupthing hf., Iceland, was unable to continue providing the branch with sufficient liquidity. On the evening of 8 October, the Icelandic parent company had already blocked access to the online accounts of its branch in Germany after having been placed under the control of Iceland’s financial supervisory authority.
Kaupthing Bank hf., German branch, currently has roughly 30,800 customers and deposit liabilities amounting to 308 million euros.
Although the branch, as an EEA establishment within the meaning of section 53b (1) German Banking Act (Kreditwesengesetz – KWG), is subject to Icelandic solvency supervision, BaFin nevertheless could order the moratorium according to section 46 KWG because there was the risk of the branch no longer being able to meet its obligations towards its creditors.
The BaFin measures are immediately executable but not yet final.