The potential financial need for the four support cases in the cooperative sector now sums up to around 1.2 billion euros – more than double what was expected at the beginning of the year. The Raiffeisenbank im Hochtaunus, where a financial gap of 400 million euros is said to have emerged according to reliable sources, is now officially the fourth institution to be taken into the protection scheme of the BVR (National Association of German German Cooperative Banks). The question remains: Is this the end, or are more cooperative banks at risk of collapsing?

The 1.2 billion euros figure is an approximation, primarily involving guarantees that may not necessarily have to be called upon. The actual financial requirement may therefore be lower. On the other hand, no one currently knows exactly how high the demand will ultimately be for the Bad Homburg institution, as audits are reportedly still ongoing.

The scale of the financial gaps is also illustrated by VR-Bank Bad Salzungen Schmalkalden. Initially, 280 million euros were mentioned here. Now the amount has doubled. Guarantees and grants totaling 560 million euros are available, of which 380 million euros have already been disbursed, a spokesperson said recently.

According to the BVR’s interpretation, four out of 672 cooperative banks is a small number, even historically. Twenty years ago, it was a mid-double-digit figure, the association notes. But that offers little comfort in light of the enormous reputational damage to the entire group. The question arises how it is possible that high-profile executives, unhindered by internal and external oversight, engage in risky business activities and drive their institutions to the brink of collapse. This question must be asked of supervisory and advisory boards as well as the BVR, auditing associations, and regulators. There is no shortage of wisdom in hindsight, but all parties involved must fulfill their responsibilities.