German banks’ association backs privately funded stabilization fund for future

German banks back new stabilization fund

BERLIN — A group representing German banks says it would support a privately-funded but state-controlled stabilization fund that could intervene in the future to rescue or wind up troubled lenders.

The Association of German Banks said Monday that it could be developed from the government-financed stabilization fund that was set up at the height of the financial crisis.

Its president, Andreas Schmitz, says that “in principle, all companies in the financial sector should be drawn into financing the German stabilization fund.”

He does not specify how large the fund should be. Schmitz’s association includes some 220 private-sector banks, including Deutsche Bank AG, Commerzbank AG and Postbank AG.

Schmitz says the group favors a national rather than European or wider fund.