FILE PHOTO: The logo of Greensill Bank is pictured in downtown Bremen, Germany, July 3, 2019. REUTERS/Fabian Bimmer
May 26, 2021
FRANKFURT (Reuters) - The mayor of Nordenham, one of the German towns hardest hit by losses on funds with the failed Greensill Bank, said on Wednesday that he would not run for re-election as he takes political responsibility for the investments.
German towns and cities had parked around 500 million euros ($611.40 million) of their savings with Greensill Bank, which collapsed earlier this year as part of financier Lex Greensill's insolvent Greensill Capital.
Greensill Bank, based in Bremen, became an attractive draw for municipalities such as Nordenham because it did not charge fees on deposits, which became increasingly uncommon as a result of European Central Bank (ECB) policies to spur the economy.
In the wake of the bank's collapse, a number of the affected towns have banded together as they seek to recoup some of their funds, which were not protected by a German deposit guarantee programme.
The Nordenham mayor, Carsten Seyfarth, said in a statement his decision not to run in September was due to the Greensill fiasco and the shadow it would cast over the election.
"Even if I am not aware of any personal or legal misconduct, it is ultimately a matter of assuming political responsibility, which now lies with the mayor as head of the city administration," he said.
Nordenham, just north of Bremen, had placed 13.5 million euros with the bank, nearly all of its short-term time deposits.
Seyfarth, in an interview with Reuters earlier this year, said the town's last investment was in February, just a week before bad news about the bank's problems became public, which was "especially painful".