Easy money: Mittelstand lending glut sparks credit risk fears

Picky in the Mittel

They were the bad old days. Distressed debt funds descended on Germany in 2003 and 2004, drawn by estimates that the country’s banks were sitting on €300 billion in non-performing loans; growth was stagnant; unemployment hit a post-war record in 2005. Behind it all, according to risk managers at the country’s listed commercial banks, was a lending market that made it impossible for them to compete on sensible terms – a market in which the Landesbanks were able to use their state-backed status to

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