How Germany’s Little Savings Banks Threaten Big Financial Woes

Regensburg has all the attributes typical of historic German cities: a 12th century bridge across the Danube, a 500-year-old bratwurst stand, a palace with a real-life princess—and a mayor who serves on the board of the local savings bank.

And as happens periodically in places across Germany, the relationship between the bank and City Hall stands at the center of a controversy. Mayor Joachim Wolbergs has been suspended pending the outcome of a trial for alleged corruption related in part to his side job as chairman of the bank’s supervisory board. The accusations involve campaign donations from a real estate developer, rights to coveted land, and a low-interest, €4.5 million ($5.2 million) loan approved while the mayor headed the board.