A Black Swan Lands In Southern Austria: The Ripple Effects Of "Mini-Greece Going Off In The Heartland Of Europe"

Tyler Durden's picture

By far the most notable news of the past week, which has still gone largely unnoticed by the greater investing community whose focus instead was on whether algos would ramp the Nasdaq to 5000, and keep the S&P above 2100, even before Mario Draghi finally began buying bonds that nobody wants to sell, was the "Spectacular Development" In Austria, whereby the "bad bank" of failed Hypo Alpe Adria - the Heta Asset Resolution AG - itself went from good to bad, with its creditors forced into an involuntary "bail-in" following the "discovery" of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies.

This shocking announcement promptly sent the price of Heta bonds crashing as creditors, no longer enjoying the explicit guarantee of the state, scrambled to get out of "northern Europe's" first Lehman moment.

But while the acute pain came and went for Heta bondholders who have seen a nearly 50% loss in just a few short months, the bigger and far more diffuse pain is only just starting, or as Bloomberg put it, "Austria’s decision to wind down Heta Asset Resolution AG sent ripples through the financial system, causing credit rating downgrades in Austria and bank losses in Germany."

The first casualty: the beautifully picturesque southern Austrian province of Carinthia.

 

Why and how was one of the 9 Austrian provinces just sacrificed? Telegraph explains:

[The Heta] bonds are notionally guaranteed by the Austrian state of Carinthia, which now theoretically becomes liable for the bail-in. It’s an echo of the mess Ireland got itself into at the height of the banking crisis, when it foolishly attempted to stem the panic by underwriting all Irish banking liabilities; the move very nearly ended up bankrupting the entire country. Hypo will bankrupt Carinthia.

 

Essentially, what the Austrian government is doing is cutting loose an entire region, rather in the way the federal authorities in the US allowed Detroit to go bust a number of years ago.

 

It’s a mini-Greece going off in the heartlands of Europe.

Specifically, to quantify the Carinthian exposure vis-a-vis its guarantee which will now be put in play: Carinthia provides deficiency guarantee on Heta's senior debt: the total is equivalent to €10.2 billion, or nearly five times the state's 2014 operating revenue. Carinthia's budgeted revenue in 2015 is just €2.36 billion, and as such the southern province of 556,000 would be unable to honor the guarantees if they came due now or in a year’s time, Governor Peter Kaiser told Austrian radio ORF on Tuesday.

In other words, we now have a waterfall bailout chain whereby the state guaranteeing the debt of the insolvent entity that guaranteed yet another insolvent entity, will itself need to be bailed out by the sovereign, Austria! Or perhaps not: Finance Minister Hans Joerg Schelling has said repeatedly that the Austrian government isn’t liable to cover Carinthia’s guarantees.

This is also why late on Friday, Moody's downgrades the State of Carinthia's rating to Baa3 from A2 (outlook to negative from stable). This is what the rating agency said:

The rating action follows the decision of the Austrian Financial Market Authority (FMA) on 1 March 2015 to initiate resolution measures on Heta Asset Resolution AG (wind-down entity of former Hypo-Alpe-Adria), in accordance with the Federal Banking Restructuring and Resolution Act (BaSAG). BaSAG is the national implementation law of the European Bank Recovery and Resolution Directive (BRRD), effective since 1 January 2015. The FMA also imposed a temporary payment moratorium on Heta's liabilities until 31 May 2016. This follows the disclosure of Heta's recent asset review by external auditors, which indicated an additional shortfall of assets of up to EUR7.6 billion, compared to the EUR4 billion expected before.

 

Carinthia provides a statutory deficiency guarantee on a very high portion of Heta's senior debt; the total guarantees are equivalent to nearly EUR10.2 billion, or nearly five times the state's 2014 operating revenue. In addition, Carinthia provides a statutory deficiency guarantee to Pfandbriefbank (Oesterreich) AG (A2, RUR) of which about EUR1.2 billion is related to Heta as of year-end 2014.

 

The downgrade reflects an increased susceptibility to event risks, including litigation from Heta's bondholders and further actions by the FMA, and greater than anticipated shortfalls of Heta's assets. All these factors could lead to a crystallization of a significant portion of Carinthia's guaranteed debt. This amount could exceed Carinthia's liquidity resources, likely lead to increased financial leverage and could require some form of extraordinary central government support.

 

We understand that there is a likelihood that the deficiency guarantee could not be enforced upon a full or partial cancellation of bailed-in debt under BaSAG, because of the guarantee's accessory nature. However, we see an increased uncertainty regarding further resolution actions. Additionally, uncertainty could result from the legal risk associated with different contractual provisions of Heta-bonds.

Whether or not the Telegraph is right remains to be seen, and the otherwise beautiful province of Carinthia is now insolvent remains to be seen, but the bigger problem is that the Heta fallout does not stop there.

As Bloomberg reports, "among Heta’s liabilities affected by the moratorium and a future bail-in are 1.24 billion euros Heta owes to Pfandbriefbank Oesterreich AG, which issues bonds on behalf of Austrian provincial banks."

Moody’s said it may cut Pfandbriefbank’s A2 rating as well as the ratings of two of its biggest member banks, Hypo Tirol Bank AG and Vorarlberger Landes- und Hypothekenbank AG, owned by the western Austrian provinces of Tyrol and Vorarlberg, respectively. A2 is the sixth-lowest investment grade rating at Moody’s.

Below are all the Pfandbriefbank members, all of which will now suffer and require further capital injections in some capacity:

Some additional color from Barclays:

The main purpose of the exclusion of secured liabilities from the application of the bail-in tool is to prevent contagion. Indeed, there are a number of contagion channels when treating the guaranteed liabilities of HETAR not as secured liabilities.

 

First, the securities benefiting from the deficiency guarantee of Carinthia are also regarded as eligible collateral for a wide range of public sector covered bonds across the EU, including Austria, Germany, Luxembourg and France. As of 30 September 2014, Austrian banks had a total of €2.7bn of exposure to Carinthia, which partially consisted of exposure to HETAR. Furthermore, Pfandbriefbank (Österreich) AG (PFBKOS), the universal legal successor of Pfandbriefstelle der österreichischen Landes-Hypothekenbanken, has €1.2bn of Carinthia guaranteed claims against HETAR. These claims were explicitly made subject to the moratorium. According to article 2 of the Austrian Pfandbriefstelle law, the member banks of PFBKOS are jointly and severally liable for the debt of PFBKOS. Thus, irrespective of the future of PFBKOS, there is an incentive for the member banks to jointly step in for missing payments from HETAR, as otherwise debt holders of PFBKOS bonds could claim payment from any of the member banks individually. Notably, the FMA decided to exclude public sector Pfandbriefe issued by HETAR from the moratorium, indicating a degree of concern about contagion risk. We believe that the inclusion of guaranteed HETAR securities in the application of the bail-in measures adds to contagion risk, as demonstrated by the PFBKOS example.

 

Second, a number of Austrian banks, including HYPO NOE Gruppe Bank AG and Vorarlberger Landes- und Hypothekenbank AG reported in their annual accounts for 2013 that they had direct exposure to HAA. At this point in time no write-downs were made as reference was made to the “value of the guarantee given by the state of Carinthia”, as well as the fact that there has been no “statutory procedure allowing a territorial authority to declare insolvency”. When announcing the moratorium, FMA explicitly expressed doubts about the value of the respective guarantees. Furthermore, this week Austrian Finance Minister Schilling, in an interview with Austrian state radio, ORF, was quoted as saying that “many have been saying that one should have known that a province like Carinthia can’t guarantee for debts of that size”. Thus, it appears very likely that Austrian banks will have to provision for claims they hold against HETAR and which were now made subject to the moratorium.

 

Third, according to article 115(2) of the EU’s Capital Requirements Regulation (CRR), claims benefiting from the deficiency guarantee of an Austrian sub-sovereign can be treated as an exposure to the central government. The respective list of the European Banking Authority contains all nine Austrian regional governments, as well as more than 2,300 local authorities. Based on this rule, EU banks are allowed to apply a 0% risk-weighting to these exposures. In combination with article 10 of the EU’s delegated act on the Liquidity Coverage Ratio, they are also allowed to treat these assets as “extremely high quality liquid assets” under the level 1 bucket of their liquidity buffer portfolios. Finally, solvency 2 rules foresee that debt issued by Austrian regions could be treated by EU based insurance companies and pension funds similarly to debt issued by the Austrian central government with a 0% capital charge.

Irony #1: the very same bonds that are about to lead to a waterfall in impairments are the ones that were, according to EU regulations, "riskless." One can only imagine how much latent risk Europe's bank have as a result of the supremely idiotic decision to keep a major subsection of European debt as 0% RWA. That may work as long as the ECB backstops everything, but the second Mario Draghi ends QE, does everything implode under its own weight?

And then there is the question, how much more maximum pain could there be in Austria. Barclays responds again"

As of year-end 2013, there were about €60bn of claims guaranteed by Austrian regions. We estimate about €50-55bn of such claims were still outstanding as of year-end 2014. In particular, we note that as of year-end 2012, the guarantee commitments of six out of nine Austrian regions exceeded the total annual income.

The full breakdown of who guarantees what in Austria:

And then, once the impairment wave of the latest European insolvency shocker is done with Austria - a wave which nobody expected at all, and it thus a legitimate Black Swan - it will flow over into Germany. From Bloomberg:

German banks yesterday also emerged as major Heta bondholders. Dexia’s Dexia Kommunalbank Deutschland AG said it owns 395 million euros of Heta bonds and will take an unspecified charge in the first quarter. Deutsche Pfandbriefbank AG also owns 395 million euros of Heta bonds and said it will write them down by 120 million euros, cutting its expected pretax profit by two-thirds.

 

NRW Bank confirmed it owned Heta bonds, declining to specify the size of its exposure. WDR TV station reported the bank owns 276 million euros of them.

Irony #2, and the biggest one of all: while German banks had spent the past 3 years preparing for the inevitable Grexit and offloading all their exposure to the now insolvent Greek state, it was a waterfall chain of events which started in Germany's own "back yard", courtesy of auditors who decided it was unnecessary to mark losses to market until it was far too late, and the immediate outcome is that one ninth of until recently Aaa/AAA-rated Austria is now also insolvent. And that is just the beginning.

One can only imagine how many such other "0% risk-weighted" Pandora boxes lie in wait across what are otherwise considered Europe's safest banks, provinces and nations.

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ThaBigPerm's picture

... Rich Carinthian leather?

Seize Mars's picture

Now that is fuckin' funny.

walküre's picture

Kärnten (Carinthia) is a most beautiful region in Europe. My heart weeps for Kärnten. Such lovely people. Beautiful women with much folklore in their chests and the men are strong providers of the true mountain family. What have the banksters done this time? It is a shame, shame, shame. Adolf is truly spinning in his grave.

Pinto Currency's picture

 

 

Bubble collapse after decades of increasingly loose monetary policy is not a black swan.

Greenskeeper_Carl's picture

Good point. Rating insolvent institutions (and countries) as AAA and declaring them riskless and letting then be back by a state whose annual income is less than 20% of the liabilities they are backing is hardly a recipe for long term stability. All bubbles burst eventually, and the world is full of bubbles, so this one popping is hardly surprising. What's IS surprising is that more of them haven't popped yet.

macholatte's picture

 

 

What have the banksters done this time?

 

They're foreclosing as usual and will distribute the bounty to their friends via new 100% non-recourse loans guaranteed by depositors or tax payers .... game on.

 

 

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game.

Matt Taibbi

 

 

 

Self-enslavement's picture

They take paper and ink, print Monopoly money and exchange it for your land, your children, your life itself.

Why aren't all the parasites being rounded up and put in FEMA camps?

That is the question.

Haus-Targaryen's picture

We all know the ECB, or the ÖNB or the Easter Bunny or BuBa will step in and backstop this.  Shoot Angela Merkel will get out on the street corner offering sexual favors for a 20€ to backstop this before it gets out of control.  

 

RadioactiveRant's picture

She'd have to pay me a lot more than 20 Euro...

Haus-Targaryen's picture

Could you imagine a 

Angela Merkel - Janet Yellen - Hillary Clinton 3 way?  

Wolferl's picture

10 billion Euro at 50% is 5 billion in liability for Kärnten.  If they borrow the money at close to 1% for 10 years that´s 500 million per year to pay back and change for the interest. That´s not nice for the Kärntner but they can afford it. They the voted for that moron Jörg Haider many times, who made all this happen and that´s what they get now. Disclaimer: A great deal of my family is from Kärnten and i´m down there in my familiy´s house many times in the year.

Haus-Targaryen's picture

Next time you are there, ask them for me when do want to annex Süd-Tirol.  

This year or next?   

Wolferl's picture

Lol, Kärntner are not Tyroleans. They are pretty proud they managed to prevent the Slaws from stealing land in southern Kärnten after WWI and WWII. In general Austria will take Süd-Tirol anytime if the people there will vote for it.

USisCorrupt's picture

For God sake let the PONZI end !

 

Hit the Domino and let it RUN !

overmedicatedundersexed's picture

at the root of all the west's problems : elite crime. the institutions who are responsible for the law: courts, police, lawyers, and yes sadly elected who's oath is to uphold it..they have all failed, corruption is our number one problem. kill the lawyers kill the judges kill the police agency.

Triggernometry's picture

I'll be riding the nearby Tyrolean Alps come April, perhaps I'll swing by...

Wolferl's picture

The Italians don´t want a vote over South Tyrol. Thiefs don´t want votes, they just want to keep what they were stealing.

new game's picture

black sparrow. tweety bird, thats it...

Theosebes Goodfellow's picture

~"Why aren't all the parasites being rounded up and put in FEMA camps?"~

Because they are the ones running said FEMA camps. If the guards become inmates, who become the guards?

TheReplacement's picture

I like him.  Don't always agree but respect his attempts to be honest and clear.

 

It's really interesting that we've had this great Tea Party movement that is all about restoring free market capitalist values, but what they completely fail to understand is that what we've got now is a situation where there is a small class of gigantic financial companies that have put themselves above capitalism.

 

See what I mean?  Soooo close... but not quite there.  Companies are great, meaning corporations of course, to blame because there really is no person in the bullseye.  Families are made of of individuals who own companies.  Companies follow owners orders. 

Dubaibanker's picture

Q: How do you know when a politician is lying?

A: Because his lips are moving!

This joke came to mind when I heard that a bank established in 1896 in Austria that had become insolvent and completely nationalised in Austria in 2009, decided NOT to pay back its bond holders on Sunday evening, 1 Mar 2015. These bankruptcies for bondholders etc have a habit of happening on weekends!

The Govt decided not to pay the bond holders using the new European Union provisions whereby depositors and bond holders of all banks are now at risk since 2014.

These new regulations implemented since last year basically mean that in the event any Govt decides that a certain bank has no money, then the Govt will not bail out or support the bank but instead ask the depositors, bond holders and shareholders to contribute (share the losses of the insolvent banks of Eurozone). These rules were quietly introduced around the world but mostly across Eurozone in 2014.

This is why I have been suggesting to keep as much money outside Eurozone as possible and not invest in any European banks, as much as possible.

Over the last 3-4 years, the Austrian Govt transferred all the 'bad bonds' and 'bad debts' into a 'bad bank' and assured everyone that the Austrian Govt will not let the 'bad bank' become insolvent. But the Austrian Govt was lying!

Of course, the bad bank failed and now even the good bank is at risk!

The capital shortfall, that has appeared 'suddenly' despite stress tests every year are a joke and a complete fabrication of lies! The shortfall is of EUR 7.9bn in this comparatively smallish bank of Eurozone and the Austrian Govt has refused to put any more money and instead will ask more than 1.2 million customers of the bank and EUR 8.5bn of bondholders to share this capital loss which basically is an insolvent bank, DESPITE EXPLICIT GOVERNMENT GUARANTEES AND HAVING SENIOR DEBT STATUS.

The price of the 2015 bad bank has dropped from EUR 74 to EUR 47 in 1 DAY. http://www.finanzen.net/anleihen/A0G4S6-HYPO-ALPE-ADRIA-BANK-INTERNATIONAL-Anleihe-charttool

Coming back to the joke.....The finance minister of Austria at that time in March 2014 declared that he will never allow a bank to go bankrupt or force losses on bond holders:

14 Mar 2014: Austria Rules Out Hypo Insolvency 

Hypo Alpe-Adria-Bank to Be Wound Down Through a Private 'Bad Bank'

By NICOLE LUNDEEN 

Updated March 14, 2014 11:02 a.m. ET

VIENNA—Austria's finance minister Friday said debt-ridden bank Hypo-Alpe-Adria Bank AG will be wound down and not allowed to become insolvent, ending months of speculation on how to close the financial black hole.

http://www.wsj.com/articles/SB10001424052702304914904579438650811890472

However, as we all know, ALL politicians lie. It's part of their job.

The Austria bank has shrunk from 328 branches to about 245 branches in the last 4 years while under Govt control and so have their assets/size.

However, the current Finance minister of Austria declared on Sunday night, March 1, 2015 that ALL bond holders will face losses including senior bond holders and subordinated bond holders. 

2 Mar 2015: Holders of Bonds Linked to Hypo Alpe-Adria-Bank Face Steep Losses

http://www.wsj.com/articles/bonds-linked-to-hypo-alpe-adria-bank-tumble-1425296342

A new plan to wind down the remnants of nationalized Hypo Alpe-Adria-Bank International AG will see owners of the banks’ debts take steep losses—even if they carry guarantees from the regional government of Carinthia, Austria’s finance minister said Monday. 

Some of the so called 'experts' are surprised as mentioned in the article. :)

But if you have read my past messages, they are all a bunch of liars! If I knew that European banks will keep failing, that means they knew it too! But just kept lying..anyways! This includes the media, research houses, CEO's and almost every senior executive who still has a job inside a bank! Part of the reason is that everyone tries to be optimistic while the whole system based on unpayable and excessive debt is crumbling. Also, most of the people believe the politicians and keep repeating the same lies because NO ONE knows the extent of the insolvencies!

Until now, senior bondholders have taken losses during the resolution of some smaller lenders in Denmark and during the winding down and merger of two Cypriot banks in 2012. Austria would be the first country to hit senior debts under the new EU-wide rules. A first €25 million slice of debt affected by the moratorium would have been due Monday.

2 Mar 2015: Europe cracking as Austria becomes newest country to force depositor bail-ins 

http://www.examiner.com/article/europe-cracking-as-austria-becomes-newest-country-to-force-depositor-bail-ins

Contrary to all the propaganda and rhetoric coming from the mainstream media regarding a global economic recovery, the world is now facing the consequences of a currency war that began in the middle of 2013, and has forced central banks to print money at historic rates.  

Austria now becomes the second European Union (EU) country to implement bail-in measures where depositors and creditors of banking debt will be involuntarily forced to give up their capital and assets to fund a bail-in measure to protect a bank from insolvency.

The first country to do 'bail in' and take money away from depositors was the second largest bank of Cyprus in March 2013 and now in March 2015, we have the exact same event and one of the large Austrian banks has decided to take money away from bond holders and maybe from deposit holders. 

2. Furthermore, just today, Ukraine has announced that their 4th largest bank is INSOLVENT:

3 Mar 2015: Ukraine central bank declares fourth-largest lender insolvent

http://www.reuters.com/article/2015/03/03/ukraine-crisis-banking-idUSL5N0W53H920150303

The central bank said 94 percent of Delta's depositors would be compensated for their lost deposits in full, because it offers guarantees for holders of deposits amounting to less than 200,000 hryvnia.

Large depositors who are 6% of the bank who keep money above the UKH 200,000 limit will see their deposits GONE!!!

2 other small banks were also declared insolvent today in Ukraine.

3 Mar 2015: Delta Bank, one of key Ukrainian banks, and two other banks declared insolvent on Tuesday 

http://www.ukrinform.ua/eng/news/delta_bank_one_of_key_ukrainian_banks_and_two_other_banks_declared_insolvent_on_tuesday_329495

You can continue to invest in Coco Bonds or hold any European bank bonds at your own risk! You will not get any advance warning when ANY bank may fail in EU! It will only happen over a weekend or when banks have been closed for an extended period of time! 

So, stay tuned....and stay safe! And try to stay out of banks physically based in the Eurozone countries including Switzerland! :) 

847328_3527's picture

This area is one of the few relatively un-touristy areas of Europe left imo. In general, Austria is cleaner, safer, stunningly more beautiful then many other areas that have become infested with ... well, I'll not go further but zh'ers get my drift.

Dubaibanker's picture

2017 bond here: http://www.boerse-berlin.com/index.php/Bonds?isin=XS0281875483

Finanzen.net link is not working for some odd reason.

stormsailor's picture

i don't have the talent to track what banks are using those bonds as collateral and when those banks on bonds have coupon due that will not get paid, or how much these bondholders will have to "bail-in".

 

probably nothing will become of any of this, but one of these days those derivitives are going to get tripped and the real last party to end all parties will start.

Squid-puppets a-go-go's picture

Well if Austria falls ina heap, it can just hand over its sovereignty and join as one nation with germany, and...

... oh wait

conscious being's picture

Not an issue this time around if that's how it plays out. The NAZIs are not in power in Berlin. There's still reason to believe Germany will do the smart and ethical thing and bail on the war party.

Tall Tom's picture

Thank you for the warning that needs be heeded.

 

As with Gold it is also like Cash. If your Cash is held as a deposit in a Bank then you do not own it.

 

If you do not hold it then you do not own it.

 

Opt out while you still have some time.

 

ZIRP? NIRP? Why in the hell are you keeping deposits in any bank? The interest garnered is not worth the underlying risk.

 

Don't give me that FDIC nonsense answer as the FDIC is severely underfunded.

 

Withdraw all of your deposits...TODAY.

 

Bury the damned Cash. You can stash it not under the mattress but you can stuff your mattress with it. It is riskier to keep it at the Bank.

HowdyDoody's picture

"many other areas that have become infested with ... "

Loud mouthed, ill dressed Americans?

JRobby's picture

These are the rules of "The Financial Madness" game. It has been going on for some time now. Need some cash? Issue debt with a AAA rating from one of the selected prostetution rings: S&P, Moody's etc.. Don't worry about the interest payments. There is no "long term" anymore.

popocatepetl's picture

You know what, I lived there 9 years (in Klagenfurt) and I haven't seen more nationalist people in whole Austria! They are Jörg Haider lovers - former state governor of carinthia, former leader of the nationalist party of Austria (FPÖ) and later founder of BZÖ. He died in carinthia in a car accident when he was driving totally drunk around 100 miles per hour from one party to another only a couple of miles away from Klagenfurt. By the way, Haider has made a big contribution to this whole hypo debacle. Now, after the whole money is gone in some deep pockets, the carinthians are waking up at last...

Al Tinfoil's picture

The Hypo-Alpe-Adria bank story is incredible (and darkly hilarious) when you start looking into it.

Google "Wiki Hypo Group Alpe Adria". (the Wiki piece is mercifully short). Then, under EXTERNAL LINKS click on Hypo Alpe Adria-A Bank Scandal in Austria.  That brings up: 

NACHRICHTEN HEUTE "Hypo-Alpe-Adria- A Bank Scandal in Austria", http://oraclesyndicate.twoday.net/stories/3950042/

Then click on the next article under External Links: "Hypo-Alpe-Adria-Bank (Scandalpe): Upddate of the Scandal".

Then for icing on the cupcake, Google "Jorg Haider".

According to these articles, Hypo originated with some persons of questionable reputation, then operations were taken over by a team of well-known con artists, involved itself in numerous scandalous deals, and was the darling of Joerg Haider the "controversial" right-wing Hitler-worshipper who has Governor of the Austrian province of Carinthia/Kaernten.  Carinthia/Kaernteen was the majority shareholder in the Hypo bank at that time.

In May, 2007, with Haider promoting the deal, BayernLB, a county bank owned by the state of Bavaria, Germany, bought a 50% plus one share interest in Hypo bank, for 1.63 billion Euros.  The sale was accompanied by allegations of insider trading in the shares making a profit of 148 million Euros. BayernLB had been trying to enter the Austrian banking market for some time.  Carinthia/Kaernten retained a minority interest. 

It is alleged in the "Update" article that Bayern did no due diligence at best, or at worst its Directors colluded with the Austrians to carry out the crooked deal.  BayernLB found Hypo to be a black hole for its money.  The bank was riddled with bad loans and shady deals including money laundering, fraud, and arms financing.

In December, 2009, the bank was nationalized by the Austrian federal government to prevent its collapse.  Bayern turned over its interest for a symbolic 1 Euro, taking a hit on the overall deal of as much as 6.7 billion Euros.  The total losses on unrecoverable loans were estimated to be between 13 and 19 Billion Euros.

In February 2014, Chancellor Werner Faymann of Austria warned that the HYPO mess remained unresolved, and that its failure would be comparable to the Kredit Anstalt event of the 1930s.  In March 2014, Hypo was split into a Balkans unit, an Italian business, and a bad bank, Heta Asset Resolution. 

March 1, 2015, Austria's Financial Market Authority imposed a moratorium on debt and interest payments by Heta, "after an audit found that it had a capital shortfall of up to 7.6 billion Euros".  Gee, surprise surprise, where did that capital shortfall come from?

As for Haider, he killed himself in a high-speed single-vehicle crash in 2008. He was allegedly heading for his mother's birthday party, had a blood alcohol reading of 3 times the legal limit, travelling at twice the speed limit, had just left a gay bar and had just had a fight with his boyfriend.  His surviving wife disputed the allegation that Joerg was gay.  The police insisted that it was an accidental death, not a murder.

Various former high-ranking officers of Hypo have been arrested, convicted, or investigated for a number of alleged offences relating to Hypo, including fraud and issuing false balance sheets.   

JRobby's picture

More bankster mentality spreading everywhere: "Rob now before there is nothing left to rob"

NoDebt's picture

That is funny.  Makes me want to go out and buy an old Chrysler Cordoba.

Youg'uns won't have any frame of reference, but believe me, the "Corinthan leather" thing has FAR outlived the car that made it famous.  It was Ricarco Montalban, yes, the same guy from 'Fantasy Island' and 'Star Trek: Wrath of Khan", who make that phrase imply far more than was actually delivered by this sad, SAD car.

Just so you know:

https://www.youtube.com/watch?v=tfKHBB4vt4c

To this day, NOBODY knows what "Corinthian leather" actually is, but when Ricardo said it, you BELIEVED it.

DriveByLurker's picture

formerly rich Carinthian lenders.

 

(fixed it for you)

ThirdWorldDude's picture

Tyler, since when is Austria part of Northern Europe?

Bankster geography much?

StychoKiller's picture

Rich?  Hah!  Everyone's broke, especially if you include all the off-the-books liabilities, such as Medicare, & Social Security.  We know it, they (TPTB) know it, Govts know it, and once the Ignorati know it, that's when the fun begins!

JRobby's picture

"include all the off-the-books liabilities, such as Medicare, & Social Security"

There is so much more than that. The magnitude of the ponzi is beyond most comprehension.

A Lunatic's picture

Lazy fucking Germans.......

LetThemEatRand's picture

The Germans should never have lent so much money to the Germans.

Self-enslavement's picture

Jewish Germans printing Monopoly money and lending it to non-Jewish Germans with interest, but you have to borrow more Monopoly money to pay off the interest. Which means you owe even more money, so... You get the point. It's a scam. Insanity. That's why the Jews have been kicked out of every country in the world.

Baby Eating Dingo22's picture

dude

You ever notice all the dirty cops and judges are Irish Catholic?

And the Koreans and Muslims running all the grocery stores

Squid-puppets a-go-go's picture

Hypothekenbank AG, eh? I wonder what they use for their loan collateral.... again..

Tall Tom's picture

YOUR FUTURE LABOR AND PRODUCTION IS THE COLLATERAL, SLAVE.

 

Now stop whinng and get back to work. We do not pay you to think.

 

Hugs,

 

The Bilderberg Group and the Red Shield.

Squid-puppets a-go-go's picture

i work a 40 hour week. Sure, it only seems like 1 hour of actual activity, but i rehypothecate that hour another 39 times

new game's picture

my greatest achievement (today), will be to squeeze out a banker, soon...

and then a clean wipe with the paper they issue..

stewie's picture

All your future labor and production are belong to us!

lakecity55's picture

Yes, but they, like us, are only serfs of a different trade. They are still controlled by Banksters.