The Return of the Finance Crisis What the Lehman Bankruptcy Means for Germany
The move by US investment bank Lehman Brothers to declare bankruptcy has set off a global earthquake on markets. The crisis is also threatening German financial institutions as well as the country's federal budget. SPIEGEL ONLINE has gathered the most important background information.
Traders work on the floor of the New York Stock Exchange: A Black Monday followed a Black Sunday.
The start of the week saw a banking earthquake, a Jet-Black Monday after a Black Sunday -- at least for the financing sector. Monday's opening on Wall Street saw Bank of America stocks tumble 13 percent, and shares of Citigroup lose 6 percent of their value. Washington Mutual, America's largest savings bank, lost over 15 percent of its market value, and Switzerland's UBS dropped over 20 percent. The biggest loss by far was suffered by the American International Group (AIG); in a single day, America's largest insurance company lost almost half of its market value.
In conversations with SPIEGEL ONLINE, finance experts have confirmed the seriousness of the situation -- and described the risks for Germany as well. "Lehman poses a risk for the international financial world," said Hans-Peter Burghof, professor of banking at the University of Hohenheim. "It's irresponsible to let a bank of this caliber simply go broke. That sends shockwaves all the way to Frankfurt (Germany's financial capital)."
In light of this new turbulence, even German Finance Minister Peter Steinbrück has been forced to evoke unusually clear images when he speaks. As he sees it, the very people who had prematurely spoken about there being a light at the end of the tunnel will now be forced to realize "that, in reality, it was the light of an oncoming train."
SPIEGEL ONLINE has compiled a brief overview of the origins of the current banking crisis and how it could affect Germany.
- Part 1: What the Lehman Bankruptcy Means for Germany
- Part 2: How Lehman Bros. Could Vanish into Thin Air in a Single Week
- Part 3: Which Other US Financial Institutions Are in Acute Danger of Collapse
- Part 4: What Are the Dangers for German Banks
- Part 5: Threats to the German Economy
- Part 6: Why the Crash Is Hitting Germany's DAX so Hard
- Part 7: Bringing the Crisis Back under Control
- Part 8: Why the US Government Hasn't Intervened
- Part 9: The Cause of the Global Finance Crisis