Bank bid to claw back bonuses

A German bank is forcing former managers to pay back huge sums of money in bonuses because of poor financial decisions relating to the credit crunch.

The actions by the private IKB bank one of the first to fall into grave trouble due to the American subprime catastrophe could trigger similar actions across Europe.

IKB's former chief executive Stefan Ortseifen has been forced to pay back €805,000 (£633,000). Three other senior executives are being sued for similar sums.

Experts believe the IKB actions are a taste of things to come for former high-fliers who invested in the subprime minefield and its complex derivatives market.

Jürgen Büller, a Frankfurt private-banking analyst, said: "This is the worst nightmare for bankers come true. There is a mood for a taste of blood on the streets. Governments are likely to want to satisfy that need in many countries."

IKB is currently going through a £6.5 billion rescue.