The sorry state of
Bayern LB demonstrates that public ownership of banks is no solution to the problem posed by banking supervision. While a large part of the
BLB's losses are due to the sub-prime credits generated in the US a not insignificant part is due to mistakes made by management - in particular the ill-fated acquisition of
Hypo-Alpe-Adria just at the beginning of the Credit Crunch in Spring 2007.
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