Herstatt Bank went bust in 1974. I was at primary school so I don’t remember. It’s a famous bank bust because it gave its name to time zone risk usually referred to as Herstatt risk.
The problem was that Herstatt received irrevocable payments of Deutsch Marks in the German time zone against a delivery of US Dollars in
The German failure triggered losses around the world.
Well what comes around goes around. It appears that KfW – a German government owned lender – transferred Euro 300 million to Lehman on the day of its bankruptcy.
It was very kind of the German taxpayer to contribute so much for the benefit of Lehman creditors! Far more than the US taxpayer did...
34 years is a long time for pay-back. But pay-back came.