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Many people hoped that Germany's Landesbanken would simply wither away when they lost their state guarantee next year. That always looked like wishful thinking.
Now the country's biggest regional wholesale lender has kicked off its survival strategy in earnest. WestLB, one of the most troubled Landesbanken, last month announced plans to raise e1.5 billion to prepare for the post-guarantee world. So much for withering away.
WestLB matters not only because of its size. It is also a role model for the whole sector. It recently hired Thomas Fischer (pictured), one of Germany's best-known and most talented bankers, to turn it around.
Fischer's challenge has been to find a role for a bank that has eked out a living in the past by exploiting the funding arbitrage provided by the state guarantee to do everything from straight lending to local Mittelstand companies to sophisticated international private equity....
