BERLIN, Sept 17 (Reuters) - Germany’s Finance Ministry said it is astonished that state lender KfW transferred 300 million euros ($426 million) to Lehman Brothers LEH.P on the day the U.S. bank filed for bankruptcy protection.
“What we have had to read today is astonishing and exasperating,” Finance Ministry spokesman Torsten Albig said on Wednesday when asked about reports of the transfer.
“We expect a swift explanation of such a technical failure, which is inexplicable to us, but which will hopefully be explained soon,” he said at regular government news conference. KfW said on Tuesday it mistakenly transferred the funds to Lehman on the day the investment bank filed for bankruptcy. The Frankfurter Allgemeine Zeitung newspaper reported that the payment was due to an erroneous swap payment.
A swap is a derivative in which two counterparties agree to exchange one stream of cash flows against another.
KfW has already taken a hit from liquidity lines given to business lender IKB IKBG.DE, the country’s biggest casualty of the subprime crisis. (Reporting by Paul Carrel and Erik Kirschbaum; Editing by Quentin Bryar)