How do you figure? German banks very much fueled the housing and lending bubbles in the rest of Europe. This is one of the reasons Germany is so against debt holders taking haircuts on their loans.
Germany is very much a part of the neighborhood going south (so to speak) in that they were at the very least enabling all the loose lending, if not actively complicit in fostering such an environment (e.g. why weren't they vetting their loans better).
One could argue that they were in a way complicit, but not responsible. Is it Germany's fault that the representatives of a country made it seem that they were able to make good on their debts?
Representatives of a country aren't exactly magicians that can hide the anemic growth and money pissing (particularly in Public-Private "partnerships") that countries like mine - Portugal - had.
They were either fully aware or extremely incompetent, and the latter isn't plausible.
I agree with you that the German banks facilitated the spending, but the fault still lies with the countries that abused that money. You cannot blame the bank for your debt after requesting your 12th credit card!
Aside: I believe that the German banks have to live with their mistakes regarding due diligence, although even that isn't so clear as it seems that the greek authorities weren't entirely honest when it came to their financials.
You cannot blame the bank for your debt after requesting your 12th credit card!
Why not? I can and do blame banks for lending money to people who they know are submerged in debt. That does NOT mean those people aren't to blame too. Blame can be attributed to more than one party.
Arguing about faults here doesn't help. It appears that Greece has the bigger faults (but they're already paying a lot for them). But I would gladly save them to save us all.
"The Germans made just about every bad investment you could have made in the last 10 years. They invested in Icelandic banks. They invested in Greek government bonds. They were heavy into Irish banks, big into Irish banks, and they bought U.S. subprime mortgage bonds."
I didn't interpret knowtheory's comment as implying that German bank's were solely responsible, but I can see how you could make that interpretation.
However, I can't provide direct quantitative information on the quality of the loans summarised by those numbers. Lewis (who seems credible to me) gives accounts of how German banks appear basically to have been taken advantage of (hence the "stupid money" comment) as customers for particularly ill-advised investments.
> Lewis (who seems credible to me) gives accounts of how German banks appear basically to have been taken advantage of (hence the "stupid money" comment) as customers for particularly ill-advised investments.
That part of the story is correct, IMHO. There are a lot of stories around it.
Germany is very much a part of the neighborhood going south (so to speak) in that they were at the very least enabling all the loose lending, if not actively complicit in fostering such an environment (e.g. why weren't they vetting their loans better).