Germany’s top finance official criticized controversial stock loans that allow U.S. and other foreign investors to avoid paying about $1 billion a year in dividend taxes in Germany.
“I think we made very clear that we were not happy about these activities,” Finance Minister Wolfgang Schäuble said Wednesday. He strongly suggested that banks discontinue the practice: “I am sure that all responsible banks and their boards will deal with this topic.”
Schäuble’s statement came a day after publication of a joint investigation by ProPublica, the Washington Post and the German news outlets ARD and Handelsblatt about the trades, which are arranged by U.S. and other banks using stocks borrowed from investment managers like Vanguard and BlackRock.
One major German player in the transactions — Commerzbank, Germany’s second largest bank — has since said it will discontinue such deals even before a proposed law to end them can be adopted.