Weserbank, a small German bank based in Bremerhaven, was forced to close Wednesday due to over-indebtedness.

Germany's banking supervisory agency, BaFin, announced Wednesday that it had placed a prohibition on the sale or transfer of Weserbank's holdings and asked a local court to open insolvency proceedings against the institution because it was unable to cover operating costs.

Weserbank CEO Gerold Lehmann blamed the global financial crisis for the bank's collapse.

"Under normal market conditions, the bank would never have had to close," Lehmann told Reuters.

Lehmann said that he had approached many other financial institutions about buying Weserbank, but none were willing to take on the bank's indebtedness under current market conditions.

BaFin pinned Weserbank's downfall to internal management decisions, not the downturn of global markets.

"The collapse was entirely a result of prevailing management conditions," said a BaFin spokesman.

In a statement, BaFin assured the bank's customers that their deposits and investments would be insured by the government.

Founded in 1912 as a small, private bank, the institution recently launched an effort to grow into an investment bank with a presence in Frankfurt, Germany's financial capital.

With €120.4 million ($189.2 million) in balance sheet totals at the close of 2007, Weserbank is one of the smallest banks in Germany.