BANKING: Collapse on the Rhine

Like many another middle-income West German, Klaus Gördel sought to put his savings in a bank that would pay the most interest. So several months ago the 45-year-old government official switched his life savings of $12,000 from a government-owned bank to Bankhaus I.D. Herstatt KGaA, one of the country's largest private banks, with 31 branches chiefly in the Rhineland city of Cologne. Last week Gördel and thousands of other Herstatt depositors had their dreams, and quite possibly their savings, wiped out in the most disastrous German banking collapse since the turmoil of the '30s.

West German banking authorities suddenly and...

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