Nowotny, who was on Friday put in charge of a task force set up to advise the government on how to wind down Hypo after its previous chief quit, said
"I believe our model of how a state should behave should be, if you like, more like
Nowotny said: "When one has reached this decision in principle that a state honours its obligations, then one must recognize that this means also making payments to creditors that one personally does not agree with."
The resignation of
Nowotny said a state-owned "bad bank" was his preferred solution and one that should be put into practice as quickly as possible, but Spindelegger had said he had no favoured option and again refused rule to out allowing an insolvency.
The split has highlighted market worries posed by Hypo, which
The expansion was fuelled by guarantees from Hypo's home province of
Ratings agency Fitch maintained its top rating and stable outlook for
Nowotny said he estimated the winding-down of Hypo would cost
And he said it would be a "sensible arrangement" if
Nowotny denied that he personally, or the central bank, which was responsible for overseeing Hypo, were to blame for what he called the "real catastrophe" of the current situation, and reiterated that he believed the auditors had failed.
"I believe the main problem was simply that many of the balance sheets weren't right and the valuations weren't right," he said. "That is a process where the central role lies with the auditors."
Deloitte DLTE.UL, Hypo's former auditors, had rejected the accusation in an email to Reuters saying: "Deloitte is surprised by the statement of
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