Europe‘s current crisis is more than economic. Between the German government advocating a dangerous austerity policy and European authorities lacking any other suggestions, it is clear that the 2008 financial crisis is no longer solely responsible for the downward spiral of Europe.
The GDP for countries in Europe has fallen by a considerable amount: 5.3% for Greece, 3.9% for Portugal, 4.1% for Cyprus, 2.3% for Italy, and 2% for Spain. This is without even mentioning the recession into which France is entering. In the first quarter of this year, the European Union economy contracted by 0.7%, or one percent when only taking into consideration the eurozone.
If it was only the 2008 economic crisis that was responsible for all this, Europe would not be one of the only one to suffer so much. For example, the United States, the birthplace of this crisis, registered a 1.9% increase in their economy in 2013 [fr] while their unemployment rate was at its lowest in four years.
Europe, which for a long time has aimed to maintain growth that compares favorably with United States, now finds itself completely lost among incoherent policies and disputes between countries[fr].
One of the main reasons for this current instability in Europe is the evident failure of the European policy authorities when their proposals seem more than enigmatic. Restricting interchange fees as proposed by Michel Barnier, the European Union Commissioner for the Internal Market and Services, is a perfect example of the Commission taking measures that will not have any concrete impact.
Capping interchange fees, bank charges paid by retailers when they make a card payment, would not only increase personal bank charges [fr], as the banks would want to recuperate the money lost by this cap, but the retailers profit margin will also increase, as they rarely lower their prices just because their costs have decreased.
The other significant issue which has notably accelerated the decline of Europe is the restricted austerity policy which the majority of EU countries have undertaken. It would be more logical for Europe to take inspiration from the countries that have pulled through, i.e. the United States, in order to stimulate the market rather than only focusing on reducing the deficit.
Youth unemployment rate in Europe between 2005-2013 via Les Crises – public domain
The most frustrating aspect about this issue is that the majority of the European leaders agree on this point, but no one dares to confront the life-long defenders of austerity, also know as « Sparkurs » [de] in Germany and its strict chancellor, Angela Merkel [fr]. But there are also critics of austerity on the German side. Last week, Gilles Moëc, head economist at Deutsche Bank, admitted to the news outlet Agence France-Presse that “there were some errors” [fr] in the selected strategy.
However, it’s not as if the Merkel method was fully tried and tested, in fact, it was far from it. Portugal, for example, had never been in such a terrible state until it was subjected to the European austerity policy. In two years, its unemployment rate increased by 5.3%, its budget deficit by 1.1%. As for its public debt, it’s now 123% higher than its GDP.
Julio Salazar Moreno, Secretary-General of Spanish worker’s trade union, USO, believes that the countries within the European Union need to stop with the austerity policy [pt], according to online newspaper Público:
Os países da União Europeia (UE) têm de parar “de uma vez por todas” com a aplicação de medidas recessivas, porque os cidadãos, alerta, estão a viver no limite dos sacrifícios
The countries within the European Union (EU) must refrain from enforcing austerity policies “once and for all” because the alert citizens are living at the very limits of their possible sacrifices.
The sledgehammer approach is just as inefficient for Greece, claims Gregor Gyzi, a president from a left-wing parliamentary group in Germany, Bundestag, by addressing the Greek readers [el] of news247:
οι επιβληθείσες, κυρίως από την γερμανική κυβέρνηση, περικοπές σε μισθούς και συντάξεις, οι απολύσεις και οι ιδιωτικοποιήσεις, όχι μόνο ώθησαν την Ελλάδα σε βαθιά ύφεση και κοινωνικά προβλήματα, αλλά κατέστησαν και αδύνατη την επιστροφή των δανείων στο εγγύς μέλλον
Imposed primarily by the German government, salary and retirement cuts, redundancies and privatisations, are not only going to push Greece into a major recession and cause social problems, but its also going to make loan repayments equally impossible.
Emigration figures for Europe are also far from surprising. In two years, 2.5% of the Portuguese population left the country. Who would have said ten years ago that today many Europeans would leave the continent to work in countries like Angola or Brazil?
Facing this alarming development, it is even more depressing to hear the responses of others, like that of the Prime Minister of Luxembourg, Jean-Claude Juncker, also the former minister of the Eurogroup, who recently gave his thoughts on the European crisis [fr] and concluded that what Europe needs is some “TLC”: a statement which speaks for itself.
The biggest banks in Europe have little to fear from the EU’s new banking regulations. But the public does. Due to loopholes the new rules will not prevent costly bailouts in the future. The risks are made clear in a recent accounting sleight of hand by Deutsche Bank.
New EU banking rules were adopted in early April after more than four years of studies, debates, and a few tugs of war. Banks will be obliged to possess bigger reserves – known as capital requirements – than in the past to make them more resilient to market downturns. These reserves act as a buffer of cash and safe assets that banks can always access in order to protect their creditors and secure the bank against insolvency; the ratio of capital to assets is a key measure of financial health. The promise is that the new rules raising capital requirement levels will help prevent or mitigate a fresh collapse in the financial system and the possible ensuing expensive bailouts of ailing banks. A brief glance would appear to show that the capital requirement increase is substantial; in some cases they appear to be doubled1.
So far, so good. However, there is a giant loophole that allows big banks such as Deutsche Bank to do the calculations of the minimum reserves required themselves. Allowing this kind of self-regulation threatens to undermine the new banking regulations. For example, recently, Deutsche Bank made an adjustment to its own internal calculation model for capital requirements, and this alone improved its books by 26 billion euros: quite a magic trick of creative accounting that puts the bank’s slogan: “A Passion to Perform” in a new light.
This loophole was heavily criticised in the wake of the financial crisis, but despite a lengthy debate on banking reform, it remains in place – a sign that the banking lobby is still extremely powerful and effective at pursuing its own interests. As a consequence, the new rules do not seem to offer any guarantee that exorbitant bailouts of bad banks – which have so far cost taxpayers in the European Union 1,7 trillion euro since 2008 – can be avoided in the future. That is, not unless new pressure for more fundamental reforms emerge.
Capital requirements and loopholes
The new European Union rules are derived from the Basel Accords, international agreements on banking regulation negotiated by representatives of the biggest financial powers within the framework of the “central bank of central banks”, the Bank of International Settlements. The key feature of the Basel rules are capital requirements – that banks have to retain a certain amount of capital in reserve compared to their assets. The riskier and the bigger the assets (i.e. anything that has value, such as shares, bonds, financial instruments of all kinds etc.), the bigger the capital requirements.
While that sounds relatively straightforward, calculations to set the minimum rate of capital required for a bank to be considered financially secure have become very complex. The Basel rules from 2004 – called Basel II – introduced the option for banks to use their own advanced internal risk assessment models to make these calculations, known as the Advanced Internal Ratings Based Approach. This new approach was pushed heavily by two big global players in the financial lobby; the Institute of International Finance (IIF) that represents the biggest banks, and the International Swaps and Derivatives Association (ISDA), the largest financial trader association2. The financial lobby was keen to protect its own self interest in being able to take bigger risks with less capital. As banks are not interested in having their capital ‘laying idle’, and as they make their money from taking risks, they consider demands for big reserves as a nuisance. Therefore any loophole to scale down the reserves required is welcome.
The decision practically allowed banks to self-assess via their own complex models how risky their investments are, and thus determine by themselves the size of their capital requirements. And all big banks of some size seized the opportunity immediately, while smaller banks with fewer resources had to stick to a standardised approach used pre-2004, based on fixed, transparent, and not least externally produced assesments.
This has given larger banks an unfair advantage over small ones. At a medium sized bank, for instance the Danish bank Nykredit, out of 4.000 employees in total, 70 staff members are dedicated to risk modeling alone. This is a measure of just how economically valuable this type of internal modeling is to big banks. Smaller banks, on the other hand, do not have the resources of such a sizable staff, and will have to use a standardised approach used before Basel II. As a consequence, they will feel “the full weight of higher capital requirements”3. Crucially, the situation also gives big banks more space to take more risky investments backed up by less capital in the vaults, potentially paving the way for bankruptcies and financial crisis.
The financial crisis reopens debate
The main problem is the vast difference between what the banks report as their reserves (as a percentage of their assets) and what they actually have available according to a standard calculation. Before the financial crisis in 2008, many banks bragged in public that they were backed up by 10 percent capital, while in reality they were down to 1-3 percent, according to a study from the German Max Planck Institute4.
The original objective of the Basel II rules was actually to raise capital requirements. However, thanks to the introduction of the internal risk models, this was derailed. Despite higher requirements, as a consequence of the leeway provided by Basel II, capitalisation of big banks dropped considerably5. This drop in capital ratio due to this “self-regulation” approach to banking was cited as one reason why the sector showed little resilience during the financial crisis in 2007 and 2008. “It is stating the obvious to say that the faith placed in models has been dented by the events of the recent crisis,” said Wayne Byrnes, Secretary General of the the negotiating body of the Basel Accords, the Basel Committee, recently6.
The financial crisis naturally led immediately to a review of international banking regulation. Negotiations started in 2009 and were concluded in the summer of 2010 with the agreement called Basel III. This process was again characterized by fierce lobbying by the biggest banks, spearheaded by Joseph Ackermann, CEO of Deutsche Bank, acting on behalf of the Institute of International Finance (IIF). The IIF succeeded in convincing the negotiators not to raise capital requirements too much, arguing this would be detrimental to growth7.
And as a bonus, in the aftermath of the crisis the banks managed to maintain the loophole created by internal models. Though some procedures were tightened, in fact, the internal risk models were never in the danger zone during the negotiations over the next set of global guidelines, Basel III.
Fixing numbers, hiding losses
As for the capital requirements that were adopted with Basel III, the banks have been in an excellent position to defend themselves from any real impact from higher capital requirements in the aftermath of the crisis with this loophole of self-calculation models assured. In fact, it seems banks have been preparing for years to deal with a potential increase. In anticipation of higher capital requirements, they seem to have been gaming the system by producing low estimates of how risky their assets are, with the aim of bringing down the capital they would in the end be required to have available. This can be seen from their assessments of risk: as the required capital is set according to numbers measuring the ‘riskiness’ of banks’ assets; between 2007 and June 2012, the banks’ own assessments of the risk was very optimistic. In a number, their ‘riskiness’ (Risk Weighted Assets, RWA) fell from 65 percent to 35 percent8.
Judging by recent discoveries, some banks went very far in their efforts to stave off an increase in capital requirements. The scandals are now popping up one by one, and the sums contested are not in the petty cash category. In January 2012, Wall Street Bank JP Morgan Chase changed its risk assessment model and in the act hid losses on derivatives deals that turned out to amount to no less than 4,8 billion euro (6,2 billion dollars)9. This incident lead to an investigation for fraud. Later, in March this year, the Bank of England accused UK-based banks of overstating their capital by 59 billion euro and hiding losses of 36 billion10.
Over the past few years, it seems, the fact that higher capital requirements seemed inevitable with the onset of Basel III, has inspired the banking community to become very creative in response. In their advanced computer models they’ve juggled with numbers so as to ensure the bottom line would not produce uncomfortably high capital requirements.
Deutsche Bank secretly on the brink
Deutsche Bank is no exception. Neither at present, nor when the financial crisis hit.
At the height of the financial crisis in 2008, Deutsche Bank was not regarded as a problematic bank, and its top management did everything in its power to retain an image as a rock solid giant. The books showed a fairly good position in that the bank seemed to meet the capital requirement criteria and the CEO of the bank, Joseph Ackermann, famously announced: “I would be ashamed if we were to accept government money in this crisis.” “At no point”, he claimed, had Deutsche been in danger11.
But in June 2011 the first testimonies emerged that indicated Deutsche Bank had not been in as good a state as it had claimed. Three whistleblowers from inside the bank itself have come forward and delivered evidence that Deutsche Bank hid a loss of about 13 billion euro in a complex derivatives deal with a nominal value of 130 billion euro. So while Ackermann smiled confidently and convincingly, during the peak of the financial crisis in 2008 when most banks were suffering distress, behind the scenes his top risk managers were struggling to cover up losses.
The reason why this episode is particularly embarrassing to Ackermann and Deutsche Bank is because the German Government was operating with a capital threshold of 8 percent, typical at the time. Banks below this level of capitalisation would be invited to join the government’s support scheme. Officially, Deutsche Bank stood at 10 percent, but if the information on the losses had been properly reported, the bank’s level would have been below 8 percent – bringing it within the threshold for government support and severely undermining its reputation as a solid bank. This would have exerted a severe blow, had Deutsche been compared to banks that were bailed out: its level was close to Commerzbank that did receive government support after sustaining a loss of 285 million euro – a number considerably less, in fact, than the losses covered up by Deutsche Bank12.
Deutsche Bank and the 26 billion euro magic trick
Deutsche Bank has also delivered an astonishing recent example of how much an adjustment to a banks’ risk assessment model can mean in terms of its capital ratio. In 2012 Deutsche Bank had a major problem with the capital requirements in place. Its accounts showed it was about to miss the mark, so the bank did three things to avoid the problem: it sold off risky assets, it bought derivatives to insure against losses on other assets, and last but not least it dramatically adjusted its internal models on risk assessments. In total, the bank managed to adjust its balance sheets to the tune of 55 billion euro. Of this, a full 26 billion euro was the result of fiddling with its risk assessment models alone13.
What does this mean? It means the bank reviewed its own computer models that had been set up to assess the value – or rather the riskiness – of the banks’ assets. This procedure allowed it to present a much more optimistic view of its investments than seemed warranted. Since there is ample space to define the models internally, the move has not been disputed by regulators so far.
The advantage to the bank was to bring its books closer in line with the capital requirements in force, putting it on similar footing to other big banks albeit “at the lower end”14. But in terms of society’s interest in resilient banks, the change to the model did nothing but obscure the bank’s real financial health.
The affair has been closely followed by the business press, and by financial institutions. One of them, Portuguese investment bank Espirito Santo, has a research department according to which the use of a standardised method, such as the one used by all before Basel II, would lead to a 52 percent increase in Deutsche Banks “risk weighted assets”, which means the bank is very far off the mark in its stated estimation of the capital it needs to have available in order to comply with the standards15.
The 26 billion dollar conjuring trick, however, worked magic for Deutsche Bank as its shares went up.
Once again, there seems to be evidence enough to show that banks are using well-designed models to drive down capital requirements to a level where the rules on their reserves become almost meaningless. On occasion this is even recognized by the banks themselves, as when analyst Mike Harrison at Barclays stated in February: “The Basel rules stand or fall by the RWA (risk assessment) calculations. If there are questions on how banks calculate their RWAs, the right amount of capital is almost a moot point if you cannot trust the denominator.”16
Scandals such as those outlined above have caused a stir in the regulatory community, since they are far more than isolated anecdotes: they involve a significant number of major players in the world of banking. As a result, the Bank of International Settlements is currently looking into these internal models17. Both internationally as well as in the European Union, the question being raised is whether a standardised approach to risk assessment with much less space for creativity would be a way forward.
In Europe too, the problem is systemic. At the moment, the European Banking Authority (EBA) is conducting investigations into the risk models of the banks, and in an initial report, the EBA asks what the reason is for the big variation in banks’ assessments of their assets. The Authority come to the conclusion that half of the variation owes not to different regulatory approaches or different structures in the balance sheets, but to variations in the banks’ models. “The dispersion calls for further investigations and possibly policy solutions”, the EBA’s chairperson Andrea Enria said in February18.
Models not challenged in the EU
But looking at the legislation adopted, a policy solution seems far away. The new European Union laws are an adaptation of its own version of the Basel rules – a weaker version by several accounts19. As far as the internal risk modeling is concerned, it was never seriously contested and hardly even formed part of the debate. While steps are being taken to include internal modeling in EU law – whereas before this was left to member states – this is not necessarily with a view to adopting strong rules on the matter.
Continuing to allow banks to use their own internal models in the new EU legislation was actually a key demand of Deutsche Bank and presumably of other big banks. In Deutsche Bank’s communication with the Commission, consolidating internal risk assessments in the European Union was on its wish list. They preferred to see a more common approach across banks to internal risk modeling. In particular they wanted to see quicker approval by regulators and a set of rules that would allow ample access to the use of internal models20. To get this far, a separate chapter on international ratings would be required – one that would leave space for common standards. This wish was fulfilled by the Commission, introduced in the draft regulation, and subsequently endorsed by the Council and the European Parliament with some loose ends to be decided at a future stage.
Generally, though, the models barely even featured in the political debate. To the extent that they were, the position of the big banks was defended, not challenged. Among the hundreds of proposals discussed in the European Parliament, for instance, only one was directly relevant to internal models. This proposed amendment, tabled by the German MEP Werner Langen, asked the Commission to respect the “proportionality principle”, should the Commission decide to adopt “technical standards” for the models21. This amendment, finally included in the adopted legislation, sent a message to the Commission not to be too anxious to regulate the internal models, very much in line with Deutsche Bank’s position22.
At the moment, the Commission is awaiting the results from the EBA’s investigations before it considers whether the “remaining degrees of freedom are still too large”23 and whether it should take new initiatives. But most likely this will merely boil down to technical standards to be proposed by the EBA end of this year24. Furthermore, what is worrying about the procedure is that it is basically a matter left to the Commission – in a close dialogue with ‘The Banking Stakeholders Group’ – an advisory group established under the umbrella of the European Banking Authority, dominated by the financial sector, including banks such as BNP Paribas, Rabobank, Santander and Deutsche Bank25.
Banking regulation in crisis
With this in mind, and the Commission’s position so far, it would be a big surprise if the big banks will see their internal models come under any significant regulatory control due to proposals adopted via this process. And the lack of political attention given to this matter – partly due to the fact that the banks easily dominate this kind of complex topic, partly due to strong banking lobbies – means there are few indications of any significant developments.
Indeed, looking at the scale of the disaster created by this type of self-regulation, it would be a more healthy response to discard the models altogether. Specialists at the OECD would agree. In a contribution to a hearing in the German Bundestag recently, two such specialists, Adrian Blundell-Wignal and Paul Atkinson, testified that: “The core problem is the Basel risk weighting system, designed to introduce an illusory ‘risk sensitivity’ that relates minimum capital requirements to ‘risk-weighted assets (RWA)’, instead of actual balance sheets. This has evolved into a system of extreme complexity that invites regulatory arbitrage to reduce RWA relative to Total Assets (TA), defeating the entire purpose of capital adequacy rules.”26
In other words, the attempt to make banks more resilient by increasing capital requirements – which is fundamentally what Basel III and the new EU laws are about – will be in vain, if the banks are allowed to persist in using their own internal models.
The argument goes even further than that. The questions posed by quite a few specialists at the OECD27, the Bank of England28, and by regulators in the US29 is actually more fundamental: it’s whether capital requirements are in the end the best tools to avert the collapse of banks in the first place. They stress that the present rules have become overly complicated and make it difficult if not impossible for regulators and supervisors to keep track of the banks. Basically they’re advocating a type of banking regulation with little space for the kind of self-regulation that the current risk assessment models embody.
A new approach to banks
In summary, the situation gives a strong impression of banking regulation in crisis. At the very moment when the European Union has adopted its own diluted version of the Basel rules, the key basis of Basel itself is being questioned. One of the reasons Basel ended up in this mess, was successful lobbying against standardised regulation by the banks. Both at the international level as well as in the European Union, big banks have had significant influence over the policies supposedly being developed to regulate them. This includes their self interested demands for the space and flexibility offered by the use of internal risk modeling, which in the end could turn out to be the most significant outcome of the Basel negotiations and the EU implementation.
At the moment, Deutsche Bank is under scrutiny for a number of business strategies, including tax fraud, the cover up of losses of the Italian bank Monte Passchi, as well as for the creative way it hid its own losses in 2008. These cases might even end up with convictions. In the case of the 26 billion euro trick, however, it seems likely that the rules were followed and everything was done by the book.
But doing everything by the book is no help to society if the rules in the book are made by and for the banks. Creative accounting is incredibly dangerous as it has the potential to paint a confident façade over a bank that might be in big trouble, and that could end up costing millions of people dear. And most importantly, considering they were a key factor in creating the financial crash of 2008, lax banking regulations need to be reformed so that we are not doomed to repeat this crisis.
The question is what kind of reforms would be able to safeguard the public from expensive bailouts and the austerity measures that tend to accompany them? A way forward could be to end the era of self-regulation, create a diverse banking sector with no banks that are too big to fail, and with public banks as an increasingly important component. Big private banks have had their chance.
1. For instance, so called Tier 1 capital will have to be raised from 4 percent to 7 percent or slightly more in some cases. The rules include different kinds of requirements, and cannot be reduced to single digits, but all in all, there is a significant increase, though – many would have it – from a very low level to begin with.
2. See for instance Ranjit Lall; “From failure to failure: the politics of international banking regulation”, Review of International Political Economy, 19:4, 2012, pp. 609-638.
3. Interview with Lars Pehrson, Director of Merkurbank, a small Danish alternative bank, April 2013.
4. Numbers cited are “core capital”, aka tier 1 capital. See Martin Hellwig; “Capital regulation after the crisis: Business as usual?”, Max Planck Institute, 2010. http://www.coll.mpg.de/pdf_dat/2010_31online.pdf
5. This was obvious from the “Quantitative Impact Studies” of the Bank of International Settelements, eg. in 2006, which showed a decline in capitalisation of 26,7 percent for the banks with advanced internal risk assessment models, and a 1,7 percent increase for the banks using a standardised approach. Quoted from Ranjit Lall (2012), page 613.
6. Wayne Byrnes, speech at a BCBS-EMEAP-FSI High-Level Meeting, 25-26. February 2013.
7. Ranjit Lall; ”Reforming global banking rules: back to the future?”, DIIS working paper 2010:16, page page 27 ff, http://www.diis.dk/graphics/Publications/WP2010/WP2010-16-Lall-Reforming…
8. Reuters, 31. January 2013, http://www.reuters.com/article/2013/01/31/us-deutsche-capital-boost-idUS…
9. Bloomberg, 4. February 2013, http://www.bloomberg.com/news/2013-02-01/occ-said-to-admit-it-missed-jpm…
10. Financial Times, 8. April 2013, http://www.ft.com/intl/cms/s/0/3c660d16-a02e-11e2-88b6-00144feabdc0.html…
11. Deutsche Welle, 20. October 2008, http://www.dw.de/german-government-sets-conditions-for-bank-bailout/a-37…
12. Der Spiegel Online, 3. November 2008, http://www.spiegel.de/international/germany/financial-crisis-germany-s-n…
13. According to Crédit Suisse the number might even be higher. The Swiss bank believes it might be as much as 41 billion euros. http://www.reuters.com/article/2013/01/31/us-deutsche-capital-boost-idUS…
14. Bloomberg, 1. February 2013, http://www.bloomberg.com/news/2013-01-31/deutsche-bank-posts-loss-as-cos…
15. Deutsche Bank’s “risk weighted assets” stand at 18 percent, which put the bank at the very low end of the spectrum. If the judgment of Andrew Lim, Espirito Santo Investment Bank, is correct, the figure would change Deutsche’s standing in the banking community dramatically, with a RWA of 27-28 percent. New York Times/Dealbook, 31. January 2013, http://dealbook.nytimes.com/2013/01/31/deutsche-banks-capital-trick-will…
16. Reuters, 25. February 2013, http://uk.reuters.com/article/2013/02/25/uk-banks-britain-riskweightings…
17. Bloomberg, 1. March 2013, http://www.bloomberg.com/news/2013-03-01/cocos-draft-bond-cops-to-stop-b… Also: In a speech in February 2013, the Secretary General of the Basel Committee – the committee developing and negotiating the Basel Accords – spoke of the possibility to ask banks to report on their capital ratio using both their internal models and a standardised approach: http://www.bis.org/speeches/sp130226.pdf
18. Press release from EBA, February 2013, http://www.eba.europa.eu/News–Communications/Year/2013/EBA-interim-repo…
19. For instance, though the Basel Accords prescribe capital requirements as minimum requirements, member states in the EU will not be able to increase minimum requirements without prior authorisation by the Commission. Also, a new kind of ratio is introduced; a leverage ratio. This is set at an unambitious level (3 percent) in the Basel Accords – unambitious because 3 percent is actually worse than the ratio of Lehman Brothers shortly before the bank collapsed in September 2008. However, the EU rules appear to be even less ambitious in that there is not fixed leverage ratio yet.
20. Letter from Hugo Banziger (Deutsche Bank) to Commissioner Michel Barnier, 17. November 2010.
21. Corporate Europe Observatory has asked Werner Langen if his amendment was encouraged by any outside parties, such as German banks. So far, Werner Langen has not responded.
22. The European Parliament’s proposals for amendments to the directive and the regulation can be downloaded here: http://www.europarl.europa.eu/sidesSearch/search.do?type=REPORT&language…
23. Response from the Directorate General Internal Market and Services to a question from Corporate Europe O,bservatory, 7. May 2013.
24. Regulation on prudential requirements for credit institutions and investment firms, article 138, paragraph 5.
25. List of members of the Banking Stakeholder Group available at the website of the European Banking Authority: http://www.eba.europa.eu/Aboutus/Organisation/Banking-Stakeholder-Group/…
26. Adrian Blundell-Wignal & Paul Atkinson (OECD), statement at the German Bundestage Finance Committee Hearing on the Draft Bank-Separation Law”, 22. April 2013.
27. Blundell-Wignal & Atkinson; ”Thinking beyond Basel III: solutions for capital and liquidity”, OECD, 2010,
28. Andrew Haldane; ”The dog and the frisbee”, paper at Federal Reserve Bank of Kansas City’s 36th Economic Policy Symposium, August 2012, http://www.bankofengland.co.uk/publications/Documents/speeches/2012/spee…
29. Jeremiah Norton (FDIC Director): ”A more prominent role for the leverage ration in the capital framework”, Speech in Orlando, Florida, February 2013 & FDIC vice-Chair Thomas Hoenig on the “illusion of safety” of Basel, see Central Banking.com, 10. April 2013.
But when we talk of Anglo Irish’s bondholders we talk of people with already accumulated wealth
We are not talking about widows and orphans or you and me. It is therefore worth
remembering, the next time an Irish politician, or any of our politicians for that matter, say that
some welfare payment can no longer be afforded, it is because the money that could have paid for
it has been given instead to the already wealthy bondholders. The Irish people are
paying and protecting the interests of the bondholders over the interests of their own children.
And it is our very own politicians who have arranged this not you not me
At the end of the third quarter of 2010, not long before Dublin requested a bailout, German banks had $208.3 billion in total exposure to Ireland, according to data from the Bank for International Settlements. That includes $57.8 billion in exposure to Irish banks, an amount exceeding British and French banks’ exposure to Irish lenders combined.
Dublin campaigned to impose haircuts on banks’ senior bondholders to reduce the amount of money the state would have to pump into Irish banks. The ECB refused, fearing contagion.
Most of these banks have indulged in absolute criminal activity and have been able to get away with their criminal acts.
So, at the end of the day the Irish people are paying off a bunch of criminals.
To copper fasten the point lets have a look at Deutsche Bank
Recent Deutsche bank events worth noting
Spying scandal – From as late as 2001 to at least 2007, the Bank engaged in covert espionage on its critics. The bank has admitted to episodes of spying in 2001 and 2007 directed by its corporate security department
Housing Bubble and CDO Market – Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004–2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a ‘case study’ of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.
Deutsche Bank Gambles Bailout Money in Las Vegas – Loses BIG During the financial meltdown of 2008, Deutsche Bank received at least $11.8 billion in US taxpayer-funded bailout money. The banking giant had made some bad credit decisions and took on some enormous risks – but the gamble failed miserably. So what did Deutsche Bank do with the funds provided by the American taxpayers? The Financial Times has the pathetic story:
Deutsche Bank has apparently gambled in the world capital of gambling and it looks like they may lose: Deutsche Bank has risked a total of $4.9 billion, the institute, a newspaper reported in a luxury casinos in Las Vegas – a significant portion of the money will probably never be seen again.
Deutsche Bank convicted in Italy in widening scandal
Deutsche Bank slashes profits to meet sub-prime mortgage legal action costs
German bank sets aside billions of euros to cover litigation linked to US bonds as Libor-rigging investigations continue
Deutsche Bank under US investigation for Iran dealings
Bundesbank investigating Deutsche Bank derivatives trade
The continuing story of Banking fraud that you must pay for
(Washington, DC) – Labaton Sucharow LLP and the Government Accountability Project (GAP) announce their representation of a whistleblower who is alleging multi-billion dollar securities violations at Deutsche Bank, the Germany-based global investment bank. The alleged misconduct was first publicly disclosed in an article published online by the Financial Times. Dr. Eric Ben-Artzi is believed to be the first SEC whistleblower to share his story publicly.
Ben-Artzi, a former Quantitative Risk Analyst at Deutsche Bank responded, “I never wanted or expected to be a whistleblower. I reported internally first and extensively, in accordance with bank policies and procedures. As the problem was not acknowledged or corrected, I felt compelled to inform the proper law enforcement authorities. Unfortunately, my family and I are paying a heavy price for doing the right thing.”
Reported Securities Violations
Dr. Ben-Artzi discovered and internally reported possible securities violations stemming from Deutsche Bank’s failure to accurately report the value of its credit derivatives portfolio. Specifically, between mid-2007 and 2010, the bank failed to properly value the gap option component in its portfolio of Leveraged Super Senior (“LSS”) tranches of credit derivatives. The gap option is the difference between the collateral paid by the LSS note buyer and the mark-to-market expected loss that the LSS note seller agreed to cover. With a $120-$130 billion portfolio in notional value, Deutsche Bank was the largest holder of LSS trades in the marketplace. By not accurately valuing it, the bank was able to maintain its carefully crafted public image that it was weathering the financial crisis better than its peers – many of which required financial assistance from the government and experienced significant deterioration in their stock prices. Even using conservative assumptions, if the LSS portfolio had been properly valued, the bank would have substantially missed its earnings estimates. Due to these material misrepresentations, countless investors may have been harmed.
Deeply troubled by the bank’s unwillingness to acknowledge and appropriately address this significant valuation problem, Dr. Ben-Artzi sought legal representation from Labaton Sucharow and reported the possible securities violations to the U.S. Securities and Exchange Commission through the SEC Whistleblower Program. The program, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010, has broad international reach and offers eligible whistleblowers significant employment protections, monetary awards and the ability to report anonymously.
Dr. Eric Ben-Artzi has worked in positions of significant responsibility at major financial institutions. He has unique expertise with the models, assumptions and calculations necessary to properly value and assess risk associated with derivatives. Earlier, he earned his Ph.D. from the Courant Institute at New York University where he also taught undergraduate courses in mathematics and financial engineering.
“When Dr. Ben-Artzi first consulted with me, I was shocked by the size and scope of the alleged misconduct,” said Jordan Thomas, a former SEC Assistant Director and Chair of the Whistleblower Representation Practice at Labaton Sucharow. “This is exactly the type of significant and unreported securities violations that the SEC Whistleblower Program was intended to address. It is one of many high-profile matters in the pipeline.”
Dr. Ben-Artzi repeatedly attempted to work through internal reporting channels, at increasingly higher levels, to correct the valuation problem. As alleged in his retaliation complaint filed with the Department of Labor, when he pressed his concerns further, he was subjected to severe hostility, isolated, denied access to records necessary to perform his job, lost his job independence and was stripped of responsibilities. In November 2011, shortly after returning from paternity leave, Deutsche Bank informed Dr. Ben-Artzi that his position had been moved to Europe and laid him off without warning, the chance to move with his job, or a real opportunity to find a new position within the financial institution. At all times prior to this illegal employment action, Dr. Ben-Artzi had received favorable performance reviews, and when laid off, was being recruited to work in other groups within the bank due to his professional expertise and reputation. Accordingly, GAP agreed to represent Dr. Ben-Artzi in his retaliation case, alleging violations of the whistleblower protection provisions contained within the Sarbanes-Oxley Act.
Tom Devine, GAP Legal Director and author of the award-winning Corporate Whistleblower’s Survival Guide, commented: “This is a classic illustration of what whistleblowers risk when trying to work within the system at firms acting in bad faith. Dr. Ben-Artzi was a model corporate citizen who discovered SEC violations that could incur serious liability, and stuck his neck out internally to warn bank management. Deutsche Bank’s response was to personally harass him, and fire him as soon as it pinned down what he knew. The retaliation was crude, and not camouflaged. Quite clearly, the point was to scare other would-be whistleblowers into silence. The lesson learned is that working within Deutsche Bank’s corporate compliance and reporting system is an act of professional suicide.”
Bank Employee ‘Know Your Rights’ Campaign
In October, GAP launched a nationwide educational campaign aimed at employees of large banks and financial institutions. This educational Know Your Rights campaign, one of the first major coordinated national efforts of its kind, seeks to inform workers of whistleblower protections and incentives that potentially apply to them, if they have witnessed or are aware of wrongdoing. Among other things, tens of thousands of leaflets were distributed at banks and financial intuitions in 15 major cities across the country, informing workers of their protections.
Dr. Ben-Artzi’s case serves as a great example of the need for this important public awareness campaign. More information can be found at http://www.BankWhistleblower.org.
Labaton Sucharow, one of the nation’s premier law firms, has been a champion of investor and consumer rights for close to 50 years. It was the first law firm in the country to establish a practice exclusively focused on protecting and advocating for whistleblowers who report possible violations of the securities laws. Building on the firm’s top ranked securities litigation platform, the Whistleblower Representation Practice leverages a world-class in-house team of investigators, financial analysts, and forensic accountants with federal and state law enforcement experience to provide unparalleled representation for whistleblowers.
The Government Accountability Project is the nation’s leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP’s mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization based in Washington, D.C.
Dylan Blaylock is Communications Director for the Government Accountability Project, the nation’s leading whistleblower protection and advocacy organization.
With laws that make foreclosures almost impossible and a financial sector stuffed full of bad loans, the Emerald Isle’s problems might only just be getting started
Among the many nasty side-effects of the European debt crisis, bigotry’s return to pleasant conversation may be the least-commented upon, and the nastiest.
Granted, few actually say Germans are power-hungry, anal-obsessed skinflints. And it’s only usually hinted broadly that Spaniards are hot-blooded, undisciplined spendthrifts; and Greeks shiftless tax-dodgers. Those people, you know?
Likewise, Ireland’s debt-fueled housing boom and banking bust–which eventually dragged the entire country under–is often dressed in ethnic livery. The Irish went on a bender and they’re dealing with the hangover. They’re guilty, have confessed their sins and willing to years of painful austerity budgets as penance.
That last bit, the submission to painful remedies demanded by foreign authorities, has earned Ireland something of a starring role in the ongoing European morality play: that of “the good debtor.” (“Greece has a role model and the role model is Ireland,” Jean-Claude Trichet, former chief of the European Central Bank, famously said back in March 2010.)
But this overlooks a few uncomfortable details. Ireland’s homeowners are the European and perhaps the world champions in not repaying mortgages. The country’s national debt has increased fourfold in about as many years. Its banking system is being kept afloat by borrowing from Europe. And while a change in the law may soon force the banks to start cleaning up their balance sheets, nobody is quite sure how bad a mess they will find there when they do.
Welcome to Ireland, where the hangover is in fact just beginning.
In the last few years, a staggering number of Irish homeowners have simply stopped making mortgage payments. The Irish central bank says that at the end of December 2012, 11.9% of Ireland’s mortgages were late by more than 90 days, up from September’s 11.5%.
And the truth is probably even worse. The chart above, which was produced by Deutsche Bank using Moody’s data, pegs the percentage of Irish mortgages that are three months late somewhere closer to 16% in September. S&P analysts argue that 25% of Ireland’s home loans are in some kind of trouble, either behind on payments, or in foreclosure, or in forbearance, which is when the bank just isn’t collecting payments. (We’ll get to why later.)
Why? To be sure, things are tough in Ireland. The recession has driven unemployment from less than 5% at the end of 2007 to more than 14%. Incomes have crumbled.
But Greece is in an even worse economic crunch. Unemployment is at 27%. The economy has shrunk by 25% since the end of 2007. Newly impoverished people are turning to firewood because they can’t afford heating oil. And even so, the amount of Greek mortgages in late-stage arrears was only 5.1% in November, according to Fitch Ratings.
What’s going on here?
Safe at Home
The simple answer is that Ireland is one of the hardest places in the world to drive a family from its home. Though thousands aren’t paying, repossessions of Irish homes remain “negligible relative to the level of arrears,” according to a recent report by Moody’s analysts.
The most recent update on repossessions from the Irish central bank shows that during the entire fourth quarter of 2012 only 38 houses were repossessed by court order. At a pace like that, it would take more than 620 years to get through the backlog of nearly 95,000 mortgage accounts that are at least 90 days behind on payments.
The chart to the right is a look at the levels of problematic loans–that is, loans in arrears–in Ireland and neighboring Britain. In Ireland, repossessions are effectively non-existent.
In fact, Moody’s analysts note that the number of Irish delinquent on their mortgages shot higher in 2012, just as political discussions centered on the possibility of a large-scale debt forgiveness plan. (It never materialized.) Moody’s suggested that the increase was driven–at least in part–by some who are gaming the system. “The current dearth of repossessions and the recently proposed personal insolvency legislation is starting to result in higher defaults due to moral hazard,” the analysts wrote.
That’s financial-speak for “people think they can get away without paying their mortgage because they know they’re not going to lose their house.” Gregory Connor, a professor of finance at the National University of Ireland in Maynooth, estimates that about 35% of those who have fallen into arrears on their mortgages have done so “strategically.” That is, they can afford to pay, but just aren’t.
Birthplace of the Boycott
There are any number of explanations for the dearth of Irish foreclosure. For one thing, Irish courts ruled in July 2011 that Ireland’s recently revamped foreclosure law contains a massive loophole. Long story short, the judge found that the law allows lenders to foreclose only on mortgage loans made after Dec. 1, 2009, when the new law went into effect. After the judgement, arrears shot higher.
The legislature could fix the the problem by passing a new law. But it hasn’t (although one is expected soon). And that’s likely because any Irish politician introducing such a bill would be brave indeed, given long-standing antipathy towards foreclosure and evictions among the Irish public.
After all, modern Irish patriotism first coalesced as a revolt against unfair evictions during the so-called land wars of the late 1800s. The period gave Ireland some of its earliest and most enduring political heroes–Charles Stuart Parnell, Michael Davitt–and villains, such as Charles Boycott, an unpopular, English-born magistrate and collector of rents from Irish tenant farmers. He gave his name, or rather he had it given for him, to the method of organized, non-violent shunning of which he was the subject until he was ultimately driven from the island.
Ancient history? Perhaps. But the notion of the sanctity of the family home still carries considerable weight in Ireland. In fact, the inviolability of a citizen’s dwelling is laid out starkly in article 40, sub-paragraph 5 (pdf, p. 158) of the constitution. So present is Ireland’s unpleasant history with eviction that Irish prime minister Enda Kenny felt compelled to give it a nod when he introduced a new personal insolvency bill last year. “There is probably no time, since the Land War, when the Irish people have felt so stressed, so anxious about their home and their family’s future security,” Kenny said. Given such historical and political backdrops, it shouldn’t be a surprise that Ireland’s legal and regulatory system is, as Moody’s put it in a euphemistic moment, “borrower friendly.”
You Really Owe It to Yourself
But historical roots or not, Ireland’s arrears mess is a real problem. It means somebody lent money and is at increasing risk of not getting it back. So who might not get paid back if Irish homeowners continue on their current path of flaky repayment? Here, things get a little bit circular.
You see, during the boom years Irish banks made the bulk of house loans that are now going bad. But the Irish government–that is, the taxpayers–now owns a large share of those banks, thanks to the roughly €64 billion ($82 billion, or 40% of GDP) it has poured into them since 2008, according to S&P analysts. So in a sense, Irish homeowners owe this money to Irish taxpayers, who are one and the same.
But wait, there’s more.
You see, Ireland itself didn’t just happen to have €64 billion lying around. It had to borrow it. Here’s what that did to Ireland’s debt-to-GDP ratio, which has surged since Ireland issued a blanket guarantee on bank deposits and debt in 2008:
High Irish debt levels spooked the markets, as investors lost faith Ireland would ever be able to manage under the burden. Ireland ultimately had to itself be bailed out by a €67.5 billion line of credit from the “troika” (the ECB, the IMF, and the EU) on Nov. 28, 2010. And in a sense, that means that some of the risk of Ireland’s derelict homeowners is being born by its European neighbors.
Nor did Ireland’s bailout mean its financial system was magically returned to the good graces of the markets. Its partially nationalized financial institutions still depend largely on borrowing from central banks to keep the lights on. The banks post some of their assets as collateral and get cash in exchange. Here is a chart of ECB lending to Irish banks, and you can see it surging as Ireland’s financial crisis worsened. It has fallen quite a bit over the last couple of years. But there were still €61.88 billion in ECB loans out to banks in Ireland at the end of February.
The Europeans Have Noticed
Ireland’s European lenders–the EU, the IMF and the ECB–know that the surge of bad mortgages is exposing them to increasing amounts of risk. And they don’t like it. In fact, in their latest report card on Ireland’s bailout program, they laid out steps the Irish government had to take to update the loophole in the 2009 foreclosure law, the one blamed for holding up foreclosures and repossessions. Those changes to the law are to be made “so as to remove unintended constraints on banks to realize the value of loan collateral.” In other words, the troika is telling Ireland to make it easier for banks to repossess and sell properties. Irish legislators are expected to pass a revamped law removing the loophole this summer.
So What’s the Real Risk Here?
Nobody really knows.
Despite the fact that the Irish government yanked a ton of toxic assets out of Irish banks and put them into a “bad bank” known as the National Asset Management Agency (NAMA), and despite the fact that the Irish government has stuffed about €64 billion into the bank’s cash cushion, “the Irish banking system has not yet fully stabilized,” wrote Moody’s analysts in a January report. Short version: Irish banks own a ton of bad mortgage assets. (See the chart to the right.) But these are just the bad loans that we know of. Some think the true position of Irish banks may be even worse.
Some suspect it’s not just legal haziness keeping foreclosures low. Irish banks may also dragging their feet on restructuring or foreclosing. That’s because if they dealt with those problem loans by foreclosing or restructuring them it would, through the magic of accounting, transform hazy “problem” loans into real losses. In fact, there’s a well-documented history of banks procrastinating on recognizing bad loans in the aftermath of financial crises. Such widespread “evergreening” of bad loans was an insidious side effect of Japan’s financial collapse in the early 1990s.
And even if Irish banks do start dealing en masse with problem loans, it’s unclear how it could play out. On the one hand, it could mean more people in Ireland start to pay their mortgages, for fear of losing their homes. But a large wave of bank foreclosures could also “throw up evidence of under-reserving by banks as they start to close out some nonperforming mortgages,” according to a January report from Standard & Poor’s banking analysts.
In other words, it could reveal banks to be in worse financial shape than everyone thought. By extension, Irish taxpayers, the Irish government and its European rescuers would have to admit they face more risk than they knew. That would be a major embarrassment for both the Irish government, as well as its euro-zone sponsors, which have built up Ireland’s reputation as a debtor nation doing everything right.
The Bottom Line
But the growing pile of defaulting home loans holds other risks for Ireland. For one, it’s choking off the flow of capital to the economy.
Let’s remember why we even bother putting up with banks. They’re supposed to be good at doling out capital efficiently. They take the unused savings of society and channel it toward productive uses–at least in theory. But if banks coming out of a financial crisis start practicing widespread forbearance and evergreening of loans, they become less and less efficient at their job, because so much of their capital is tied up in bad loans instead of getting put to good use.
That’s part of what’s happening in Ireland right now. You can see, mortgage lending has pretty much collapsed.
Now, lending would logically fall after a financial crisis triggered by too much debt. But it will have to stop falling before the domestic economy starts growing.
That’s why Ireland must overcome its anti-eviction tendencies and clear the backlog of bad loans. And it’s not just the homeowners that will feel the pain through necessary foreclosures and repossessions. Banks must fess up to their losses and restructure bad debts.
It won’t be pretty or easy. But for the Irish government–so often dominated by the European powers that bailed the country out–it’s one of the few areas where it can still act. As for the European officials who have built Ireland’s painful austerity push into the “model” response for troubled European countries? They’re going to have to admit even supposedly virtuous Ireland is having serious difficulties making austerity work.
Can you trust International Banking?
Judge for yourself
Just a quick look at recent developments
Standard Chartered accused of exposing the US to terrorists, drug dealers, and weapon dealers by hiding $250 billion of transactions with the Iranian government.
Deutsche Bank admits Libor involvement.
Germany’s biggest bank faces regulatory action after admitting complicity in rate-fixing scandal along with Barclays.
HSBC ‘allowed drug cartels to launder money’
Early July –details of Barclay’s bank/ *Libor’s scandal started to emerge (rate fixing)
The governing bank of England was also aware of this illegal manipulation.
In Canada – participants in the Libor scandel include the Canadian branches of the Royal Bank of Scotland, HSBC, Deutsche Bank, JP Morgan Bank, and Citibank, as well as ICAP (Intercapital), an interdealer broker.
USA- In the USA regulators were focusing on Bank of America Corp., Citigroup Inc. and UBS AG in their probe of Libor’s rate manipulation.
Goldman Sachs has not yet faced the music for cooking the books of Greece.
This manipulation allowed the Greeks to falsely comply with the requirements for Euro zone admission.
Will they ever be sanctioned and if not why?
What you will understand from the above is all the major banks are involved in illegal rate fixing.
Rate fixing means, you Johnny Citizen gets cheated out of money and the bankers get fat bonus payments
* the London inter-bank offered rate
The Fraudulent Traveller
This rather silly senator appears to be hell-bent on setting a senate record for difficulties with the law. Let us have a look at her track- record. She took her plumber take her to court rather than pay him what he was owed. Had planning permission for a two-story garage refused? She went ahead and built it regardless of the law. Officials recommended demolition of the building due to blatant flaunting of the planning process. However, a “higher” up “official” granted her retention. I wonder if this could be maybe a close by senior say like in Mayo. In early July, this woman received a fine for not having road tax on her Merc c180. She stated that this was an oversight on her part. In Late July fined €100 for not having a train ticket. The very same senator receives €2,424 a month in travel and accommodation expenses. One might say a nice little earner when you do not pay your road tax or train fares. Jesus’ lads but you cannot beat the old gravy train. Some neck on this woman but then again, rules and regulations only apply to the serfs. It might be interesting to check out her overnight accommodation expenses to see how they stack up. Between oversights, lack of foresight and poor visual vision one wonders how this woman can even find her way to the senate let alone claim expenses.
To compound all this nonsense Fine Gael issued this gobbledygook as a damage limitation exercise.
Senator Healy Eames boarded the 6.50am train to Dublin in a rush, at Athenry station yesterday morning (Thursday). She did so on the understanding that she would be able to purchase a ticket on board, as she had previously done on recent occasions. An officer approached her from the revenue protection unit on board who asked her for ID. She produced her Seanad ID card. She offered to buy a ticket as normal. He told her she could not buy a ticket from him and fined her €100.
It appears the true heirs to the Feeling small party are well and truly on board the gravy train.
Daddy says Skippy won’t be going back” to face the prospect of jail in the Republic. Daddy says he has no chance of getting “fair play or justice” because of the corrupt way the authorities have handled the Quinn case. Daddy says Young Skippy is under a lot of pressure, and he deserves our sympathy. If daddy Quinn has evidence of “the corrupt way the authorities handled the case,” then perhaps he might share the information with the Gardai. Let us all remind Daddy Quinn that the entire nation witnessed dear little Skippy on video lying through his teeth. Let’s jog the memory of the old Quinn a little further and say “Sir” you son was given every chance to comply with the law but failed to do so. He skipped court and did a runner. The sheer arrogance and smug self-righteousness by the Quinn family of their wrongdoing defies belief. Hopefully at the end of the day they will all end in Jail. —————————————————————————————————————————-
Are you Ready to be a Bonded Serf?
What the major political parties will not tell you is there is no way forward from the current economic crisis except a doomsday scenario. Are they preparing for it? Yes is the answer. The current system is to be replaced by the new political credo of “Economic serfdom” which means welcome to P.I.G.S. party feudalism. The middle classes and working classes will shortly cease to exist. What this means is that 95% of the population will become bonded serfs to the privileged. Future generations will be born into economic slavery to serve the Elites. They will be controlled by the enforcers of the vested interests until released by death from exhaustion having procreated to keep the supply system going. The Royalty of Banks, the Royalty of Global Business, and the Royalty of Unelected Leaders are now your governors such is your destiny.
The billion barrel oil find off the Cork coast
Hurray, hurrah we are rich once again. Twenty-five per cent of the corporate profit is our cut, however; there are two points to note. They can write off exploration costs against tax. The twenty-five per cent can increase to forty depending on the profitability of the field. This is a red herring, as the number crunchers will ensure this never happens. I guaranteed we will get **** yet once again. It looks like we are destined to remain Kings of the Sardine industry. Now that chap Chavez begins to look rather interesting. Just how did he do it, perhaps time for a government junket to Venezuela?
Mario Draghi the man who pulls the fiscal strings in Europe. Does he represent the people of Europe? Not on your life, he has one interest and that is to take care of his friends in Banking. Consider the following.
2. Worked for Goldman Sucks
3. Former Governor of the Bank of Italy
4. Worked for Italian Treasury
5. Worked for the Bank of International Settlements
6. Worked for the World Bank
Does this look like the CV of a trustworthy man? Be assured he will not work in your interest but he knows how to stir it up. Yes the very same man who insisted we pay penal interest rates for the bailout.
€6000.00 per head per month to the Quinn family
children while people on the Dole starve
The High Court has approved the payment of monthly living expenses €30,000 to the five adult children of bankrupt executive Sean Quinn and three spouses. Well now, you know if your low income nobody gives a toss about you. No social welfare means test for the boys as you can see the elite look after the elk.
WANTED Peter Darragh Quinn If you know the whereabouts of this man please inform the Gardai. Do not approach this man as he is carrying a large amount of lethal coinage
Sean Quinn: Well-known figures who rallied to support
bankrupt tycoon run for cover
PROMINENT figures from GAA and television yesterday ducked for cover when asked to comment on their involvement in a rally supporting fallen tycoon Sean Quinn.
They included Tyrone manager Mickey Harte, left, and former Meath star Colm O’Rourke, right, in the middle is that insufferable clown father Brian D’arsey. These three were among those who marched in Ballyconnell, Co Cavan in support of the Quinn’s. One wonders if the these three attention seekers ever gave a thought to the poor tax payer
Former Bank Chairman arrested on Fraud Charges
Sean Fitzpatrick made “no comment” when he was charged with 16 counts contrary to Section 60 of the Companies Act. The charges allege that before it became nationalized, he permitted the bank to “give unlawful financial assistance” to 16 named individuals for the purpose of or in connection with a purchase by the same people of shares in the then Anglo Irish Bank Corporation Plc. It is claimed the alleged unlawful financial help to buy shares was given between July 10 and July 17, 2008 to 15 people. These include the so-called “Maple Ten” group of Irish Investors and several members of Sean Quinn’s family – and from July 17 until July 30, of the same year, to Patricia Quinn, the wife of now bankrupt quarry tycoon Sean. Among the names on the charges is Sean Quinn Junior, jailed last week by the High Court for contempt of court for hiding €500m of property assets from Anglo, now called the IBRC. Also included in the names of people who allegedly got financial assistance to buy shares in the bank are: Colette Marie Quinn, Aoife Quinn, Ciara Quinn, Brenda Quinn, property developer Patrick McKillen, Seamus Ross, Brian O’Farrell, John McCabe, Gerard Maguire, Patrick Kearney, Gerard Gannon, Gerard Conlon, Sean Reilly and Joseph O’Reilly.
Still At Large
The Bankers Story
The capital of Rotten Island Bud Nil was an ancient and revered city. However, in keeping with the wealth and affluence of the times the city councillors renamed the city “Wonderland.” Somewhere between Never Neverland (North side”) and the inner sanctum of Wonderland there is a sector called” Forever Wonderland’.” This neighbourhood is the financial heart of the nation. In this district, lived a wealthy young banker. His notable attributes were a craving for attention, a bad memory, and a chequered career. He treasured the radiance of other inducements and was a frequent visitor to Feckerland the area of dance, revelry, alcohol, and Chateaubriand. Parochially, friends and acquaintances, knew him as “Disney” Fitzfiddle. Men did travel across the length and breadth of the land to win the friendship of “Disney.” He loved a good story from waiting recipients of fiscal credits, borrowers, whose habitual wrongdoing he totally ignored. In his own words, he stated, I was big. Some came and said “Disney” can you lend me 10 million quid, and I’d say. Sure, no problem at all, we can do it without recourse to Peter and Paul for you know I am a man who can lend without rancour. Let us go for a ride in the Bentley and lunch at the “Incidentally” and later tarry awhile in Dick Gentlys (a well-known brothel). Alas, the good days, now I am but the evil pantomime villain, who only borrowed a handy hundred million. Look at who elevated me, aren’t we all cronies of the Dons of the Feeling Smallers. Why did you know? I even had the occasional game of golf, with the nation’s esteemed Boss, the great incompetent Mr. Buttocks, the pillar of lies and good-byes. Agreed, I may have moved a few loans around a bit, temporarily mislaid them, perhaps duped an auditor or two. Had an odd incriminating letter gone missing here and there? Aha, but my God, me self and “The Little Drummer Boy” good times we had. Now they say I am bankrupt with only three million quid to live on. Understand lads; for me, the attraction was the crack of the fiscal flimflam. Never mind we can bank on ‘Sinister House’ to direct the department of “Fiscal Make Believe” to clear up this Disney quicksand No, no regrets, sure was the problem not global, in all sincerity nothing to do with me.
In the next issue of “Misebogland” the truth behind the
– Finally some information concerning Misebogland is the leading newspaper on the Island of Rotten Island. For those of you who are unaware Rotten Island is a mirror image of the Island of Ireland that happens to exists in a parallel universe. However, as you become familiar with the Misebogland, you will note and observe that there are subtle differences due to mutations that have occurred over the course of time. For example, the Irish Language has disappeared. The current Prime Minister Dame Enda is an outrageous transsexual.