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AIG, KfW Bankengruppe, IKB and Lone Star Bank (Texas)

1 May, 2009

KFW  Bankenruppe was one of several German banks to receive money ($0.5 billion) from the AIG bailout package. (here)

KfW emerged after World War II, with the aid of the Marshall Plan, to assist in the rebuilding of Germany by financing the development of energy, housing, and small businesses.  During the 1950’s, KfW moved into the area of export finance, helping obtain financing to build industrial plants and other cross-border transactions.  Within a few years the group had become a major global financial institution offering assistance for international projects, export finance and financial assistance to developing countries to rebuild infrastructure, improve living conditions and support “microfinancing” – the development of small individual businesses.

KfW consists of the following financial institutions:  KfW Mittelstandsbank, KfW Privatkundenbank and KfW Kommunalbank, KfW IPEX-Bank GmbH, KfW Entwicklungsbank, and DEG.

So what does KfW have to do with AIG?  It is listed as one of the “counterparties” (institutions involved in default credit swaps with AIG) who received “collateral” payments from the bailout funds which accounts for the $0.5 billion it received.  But, on 4 Sept, 2008, it was announced that the two financial institutions had agreed to become stockholders in Microcred Nanchong. (here)    The other two partners are IFC (International Finance Corp. – part of the World Bank Group) and MicroCred S.A.

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