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Mayor of German town hit by Greensill losses won’t seek re-election By Reuters

© Reuters. FILE PHOTO: The emblem of Greensill Bank is pictured in downtown Bremen, Germany, July 3, 2019. REUTERS/Fabian Bimmer/File Photo

FRANKFURT (Reuters) – The mayor of Nordenham, one of the German cities hardest hit by losses on funds with the failed Greensill Bank, stated on Wednesday that he wouldn’t run for re-election as he takes political duty for the investments.

German cities and cities had parked round 500 million euros ($611.40 million) of their financial savings with Greensill Bank, which collapsed earlier this 12 months as half of financier Lex Greensill’s bancrupt Greensill Capital.

Greensill Bank, primarily based in Bremen, grew to become a sexy draw for municipalities corresponding to Nordenham as a result of it didn’t cost charges on deposits, which grew to become more and more unusual consequently of European Central Bank (ECB) insurance policies to spur the economic system.

In the wake of the financial institution’s collapse, a quantity of the affected cities have banded collectively as they seek to recoup some of their funds, which weren’t protected by a German deposit assure programme.

The Nordenham mayor, Carsten Seyfarth, stated in a press release his resolution to not run in September was because of the Greensill fiasco and the shadow it could solid 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 stated.

Nordenham, simply north of Bremen, had positioned 13.5 million euros with the financial institution, almost all of its short-term time deposits.

Seyfarth, in an interview with Reuters earlier this 12 months, stated the town’s final funding was in February, only a week earlier than unhealthy information in regards to the financial institution’s issues grew to become public, which was “especially painful”.

($1 = 0.8178 euros)

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