Austria: Back to the Past

Austria demonstrates that political control of banking institutions by no means assures that banks are managed in a responsible fashion. Numerous banking problems during the past 30 years (Laenderbank, Bawag, Kommunalkredit, Bank Burgenland) prove this point. The most recent example of a bank that was the plaything of politicians and got into trouble while the regulators turned a blind eye is the Hypo-Alpe-Adria Group in the southern province of Carinthia. The bank had to be rescued by the Federal Government in December 2009 and to cap it all two members of the political establishment have now been appointed to the supervisory board. Plus ca change....