The head of Germany's state-owned KfW development bank resigned Monday as a result of the financial market crisis that has severely dented performances at German banks.
The state-owned KfW bank's headquarters in Duesseldorf
Ingrid Matthaeus-Maier, 62, had resigned with immediate effect over the turmoil at the IKB Deutsche Industriebank, in which the KfW holds 43 per cent, according to information received by German press agency dpa.
KfW currently owns roughly 43 percent of IKB, a specialist in loans to small- and medium-sized business that ran into trouble after investing heavily in securities backed in part by high-risk US mortgages.
KfW board member Juergen Koppelin told dpa that the IKB would need an additional 1.8 billion euros ($2.8 billion) in bailout money, on top of the 8.5 billion euros it has already received.
The IKB has been badly hit by its speculative trading in the US subprime mortgage market and has had to be bailed out repeatedly. The KfW has stumped up 6 billion euros so far.
The IKB is mainly involved in providing long-term finance for medium-sized German companies.
The KfW was set up after World War II as a state-backed financial institution aimed at providing funds for rebuilding the German economy.
It had long been rumored that Matthaeus-Maier's contract would not be renewed when it came up for renewal next year.