IKB Bank problems someone else's fault. KfW CEO resigns - problem solved ?

Another banking chief has fallen on their sword - this time Ingrid Matthäus-Maier 63, chief executive of Kreditanstalt für Wiederaufbau (KfW), the state-owned German development bank, has resigned - it is said for health reasons.

KfW owns 45.5 percent of the corporate lender IKB which had to be bailed out with a rescue package of more than €8 billion ($12.6 billion) after making heavy write-downs on its security investments. KfW covered around €6 billion of the bailout volume.

German Finance Minister Peer Steinbrück said today , after a meeting of the KfW board, that KfW would have to make a further write-down of around €1.8 billion as a result of its stake in IKB. The 2007 full year operating result turned to a loss of €6.2 billion from a profit of €1.6 billion principally because of charges of €7.2 billion for the rescue of troubled IKB Deutsche Industriebank AG. (see results here in English)

Matthäus-Maier had been financial policy spokeswoman for the center-left Social Democrat Party . She had been on the management board since 1999 and only became CEO in October 2006 taking over from Hans Reich.

Current board member Wolfgang Kroh is to take over her responsibilities as chairman of the board temporarily.

At IKB Four management board members, including Chief Executive Officer Stefan Ortseifen, were dismissed last year after an audit by PricewaterhouseCoopers found the crisis was a result of ``flawed'' risk management.

IKB has lost about three-quarters of its market value since July 30, when it cut its full-year forecast and received emergency funding less than two weeks after saying the subprime crisis wouldn't affect it.

IKB held their annual general meeting in Dusseldorf today - Ulrich Hartmann, head of IKB's supervisory board, told a very disgruntled shareholders that the bank's management board failed to inform the supervisory board about risks and previous inquiries from Germany's BaFin financial regulator and KPMG LLP failed to show potential losses. Not us Guv ... we ..er.. just ..er supervise.

Hans-Richard Schmitz of the DSW shareholders ssociation said.."Apparently, there wasn't a soul in the entire bank who had a grasp of risk management, Shareholders have been left with a shattered bank and no one wants to take responsibility.''