Financial Market Stabilization Amendment Act
| Basic data | |
|---|---|
| Title: | Law to further stabilize the financial market |
| Short title: | Financial Market Stabilization Amendment Act |
| Abbreviation: | FMStErgG |
| Type: | Federal law |
| Scope: | Federal Republic of Germany |
| Legal matter: | Commercial administrative law |
| Issued on: | April 7, 2009 ( BGBl. I p. 725 ) |
| Entry into force on: | April 9, 2009 |
| GESTA : | D101 |
| Please note the note on the applicable legal version. | |
The law for the further stabilization of the financial market (Financial Market Stabilization Supplementary Act - FMStErgG) is a German article law .
Article 1 of the Act changes the Financial Market Stabilization Fund Act . Article 2 amends the law to accelerate and simplify the acquisition of shares in and risk positions of companies in the financial sector by the financial market stabilization fund .
The core of the law is Article 3. This article introduces a new law, the law for the rescue of companies to stabilize the financial market (Rescue Takeover Act - Rescue Act) . It enables the state to take over banks in three phases.
Articles 1 and 2
Article 1 changes the Financial Market Stabilization Fund Act and introduces in Section 5a the authorization of the Financial Market Stabilization Fund to acquire shares in companies in the financial sector.
Article 2 changes the law to accelerate and simplify the acquisition of shares in and risk positions of companies in the financial sector through the "Finanzmarktstabilisierungsfonds - FMS" fund and gives it the abbreviation and abbreviation of the Financial Market Stabilization Acceleration Act (FMStBG). Above all, it regulates the possibility of capital increases in companies that have received aid from the state to stabilize the financial market.
Article 3: Rescue Takeover Act
| Basic data | |
|---|---|
| Title: | Law to rescue companies to stabilize the financial market |
| Short title: | Rescue Takeover Act |
| Abbreviation: | Rescue Act |
| Type: | Federal law |
| Scope: | Federal Republic of Germany |
| Legal matter: | Commercial administrative law |
| References : | 660-5 |
| Issued on: | April 7, 2009 ( BGBl. I p. 725, 729 ) |
| Entry into force on: | April 9, 2009 |
| Last change by: |
Art. 4 G of 10 July 2020 ( Federal Law Gazette I p. 1633, 1635 ) |
| Effective date of the last change: |
July 17, 2020 (Art. 5 G of July 10, 2020) |
| GESTA : | D061 |
| Please note the note on the applicable legal version. | |
First phase
In this phase all possibilities are to be examined to achieve a controlling majority of the state with the mildest means . The law provides for relief in company law for this purpose.
Second phase
If the first phase is unsuccessful, the state should use further means to achieve a controlling majority of the share capital in the bank to be nationalized. For this purpose, the law provides for a change in company law, whereby majority resolutions in a one-day general meeting of the bank are limited to fifty percent plus one vote of the equity. The representatives of fifty percent of the equity capital must be present at the meeting to ensure a quorum. Shareholders who delay or thwart the decisions to continue the bank are obliged to pay damages under civil law. The state's controlling majority is achieved through a capital increase on the part of the state with a subsequent capital cut . This will reduce the number of shares in the bank and offset the existing losses. The resolutions of the general meeting are immediately entered in the commercial register.
Third phase
In this phase, which provides for the takeover of the non-state share capital, the remaining shareholders can receive a purchase offer, which is limited to fourteen days. For the takeover of the bank by the state, a majority of shares is set at ninety percent of the company's capital. If this takeover of the bank under stock corporation law does not occur because the majority of the shareholders do not agree to the takeover or prevent it by other legal means, expropriation proceedings will ensue . This procedure must be initiated by June 30, 2009. A corresponding ordinance on expropriation proceedings can be issued by October 31, 2009. The legal review of the admissibility of the procedure lies with the Federal Administrative Court . The shareholders to be expropriated should receive appropriate compensation. If the nationalized bank is returned to private ownership, the expropriated shareholders receive preferential rights for the shares.
criticism
Due to the guarantees and subsidies of around 92 billion euros already provided by the state and the risk that this money would be lost in the event of bankruptcy or a sale, the federal government had planned the law to nationalize the bank holding company. The subsidiary Depfa, which was one of the decisive factors in the crisis , was a profitable, state-owned company before privatization until the early 1990s. Thus, in the event of a re-nationalization of Hypo Real Estate, the German state would incur double losses, on the one hand through state-lost profits of Depfa, on the other hand through the costs of the now necessary re-nationalization.
The Federal Government defends the law by stating that in the event of a possible insolvency and subsequent break-up of HRE, a total loss would also have to be expected. The Deutsche Bundesbank and the financial supervisory authority Bafin also support the nationalization of Hypo Real Estate.
The parliamentary group Die Linke and the FDP in the German Bundestag voted against the law, the parliamentary group of the Greens abstained. The left criticized the financial burden on taxpayers to save the bank. She submitted an unaccepted amendment that HRE may only be re-privatized after nationalization if at least the state guarantees used are repaid with interest by the buyer.
The FDP is against nationalization in general and Rainer Brüderle (FDP) said before the vote in the Bundestag: "Today is a day of bondage". The rescue transfer law is "a blow to our economic order". FDP chairman Westerwelle fears further similar nationalization actions, sees a "GDR light" in the law and referred to the wording of the law in which the Federal Ministry of Finance is referred to as the "expropriation authority". Similar criticism as the FDP expressed the chairmen of the employers' association and the Federal Association of German Industry
Since the bank Hypo Real Estate (HRE) was almost three-quarters of the free float and also had a major shareholder in J. Christopher Flowers who held around 25 percent of the share capital, broad circles are economically affected by the takeover project and a possible expropriation. The major shareholder Flowers had acquired his shares at a price of around 30 euros and criticized the fact that if he forcibly surrendered his shares for around one euro per share (market value in March 2009), he would lose around one billion euros. Without the state aid granted, however, he would have had a total loss. In addition, critics see the planned takeover action to preserve the substantial intrinsic values in the bank's balance sheet ( total assets around 400 billion euros) with a complete change of ownership at the lowest possible terms.
It is possible that there will be constitutional complaints before the Federal Constitutional Court based on the guarantee of property under Article 14 of the Basic Law. It would then have to be clarified whether the principle of proportionality is preserved in the law. According to constitutional lawyer Michael Brenner , proportionality requires that, before expropriation, the federal government must first try unsuccessfully to acquire the bank's shares by hand or at the general meeting.
Legislative process
The law was passed by the Bundestag on March 20, 2009. The Federal Council approved on April 3, 2009. The law was drawn up by the Federal President on April 7, 2009 and announced in the Federal Law Gazette on April 8, 2009.
Further development
After a takeover offer by the financial market stabilization fund , the federal government was able to increase its stake in Hypo Real Estate to 47.3 percent of the shares. At an extraordinary general meeting on June 2, 2009, he implemented a capital increase using the special provisions in the Financial Market Stabilization Supplementary Act , with which he can increase his stake to 90 percent. In the next step, he can then carry out the so-called squeeze-out of the remaining shareholders and completely take over the bank without expropriation. This means that the deadline of June 30, 2009, by which expropriation proceedings would have been initiated, expired without making use of the possibility of expropriation.
Bank Hypo Real Estate was nationalized by resolution of the Annual General Meeting on October 5, 2009. The financial market stabilization fund acts as 100 percent owner for the Federal Republic of Germany.
In February 2012 the Bundestag passed a Second Financial Market Stabilization Act and in December 2012 a “Third Act to Implement a Package of Measures to Stabilize the Financial Market” ( Third Financial Market Stabilization Act - 3rd FMStG). It came into force on January 1, 2013.
literature
- Florian Becker , Sebastian Mock: Financial market stabilization in permanent. On the changes to the FMStG. In: The company. 2009, pp. 1055-1061.
Web links
- Text of the draft (March 12, 2009, printed matter 16/12224) (PDF; 176 kB)
- Synopsis of the changes due to the Financial Market Stabilization Amendment Act (html)
Individual evidence
- ↑ Background: Legislative plans and steps leading to a possible bank nationalization , Mitteldeutsche Zeitung , February 18, 2009.
- ^ German Bundestag plenary minutes of the 212th session of March 20, 2009 (PDF; 1.6 MB), p. 22980.
- ↑ Deutsche Welle: Bundestag Approves Bank Expropriation Act , March 20, 2009.
- ↑ Amendment by members of the Die Linke parliamentary group ( Memento of the original from January 30, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , March 10, 2009.
- ↑ Employers' associations against possible expropriation , accessed on March 21, 2009.
- ↑ Financial news: BDI prefers other solutions , accessed on March 21, 2009.
- ↑ Manager Magazin: "Politically there is no alternative" , February 25, 2009, accessed on April 13, 2009.
- ↑ Tagesschau : HRE can become VEB from March 20, 2009.
- ↑ Press release: Federal Council approves Bank Rescue Act ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. from April 3, 2009.
- ↑ Hypo Real Estate: Press release on the result of the Extraordinary General Meeting ( Memento of the original from January 30, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. dated June 2, 2009.
- ↑ Press release of the financial market stabilization fund : SoFFin holds 90 percent of Hypo Real Estate Holding AG (HRE) after the capital increase. The complete takeover of the company is being prepared on June 2, 2009.
- ↑ Press release of the Financial Market Stabilization Fund of November 4, 2009
- ↑ bundestag.de
