Ackermann the awkward

17 March 2003

It may be because Deutsche Bank s chief executive is genuinely worried that the sector might drift into crisis. The government has not done much to inspire confidence. While showing polite interest, it has largely stuck its head in the sand.

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Josef Ackermann said the German government should prepare for a possible bailout of the country's weak banking system.

In an interview with the Wall Street Journal Europe, Deutsche Bank's chief executive said: The best thing is if we do everything to ensure that none of this will be needed. But smart managers and government leaders must consider how to be prepared for a worst case.

It is the second time this month that Ackermann's name has been linked with a plan to bail out weak banks. It remains uncertain how any plan might work but one possibility is the creation of a bad bank – an entity partly or wholly funded by the government designed to acquire bad debts from banks, leaving them with good loans on their books.

Ackermann was criticised by German banking regulators after it became known that he raised the possibility that such a bad bank might be needed.

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