IKB insolvency might have been better-German EconMin

BERLIN, April 12 (Reuters) - It might have been better to let German subprime casualty IKB (IKBG.DE: Quote, Profile, Research) become insolvent, the country's Economy Minister was quoted as saying on Saturday.

"You're always wiser after the fact," Michael Glos told German weekly magazine WirtschaftsWoche. "The right policy might have been to let the IKB become insolvent quickly."

IKB, a lender to small German firms, is the country's highest-profile victim of the global financial turmoil.

The bank has been rescued three times at a cost of more than 8 billion euros ($12.66 billion), mostly with the help of state-owned development bank KfW, IKB's biggest shareholder.

On Monday, the KfW's chief executive said she would resign after weeks of criticism for her handling of the IKB crisis.

Glos, who is also the KfW's supervisory board chairman, said the 37-strong panel was unwieldy and should be reduced in size.

The minister, a member of Chancellor Angela Merkel's conservatives, also took aim at Josef Ackermann, chief executive of Deutsche Bank (DBKGn.DE: Quote, Profile, Research), Germany's biggest lender.

Glos said Ackermann's appeal last month for state intervention to restore order to markets had been met with "astonishment" by both the public and politicians alike.

"It really is quite strange when those who tend to describe too much state intervention as the basic evil of the social market economy start calling for the state to act," he said.