The Unthinkable Just Happened In Spain

Tyler Durden's picture

Submitted by Don Quijones via WolfStreet.com,

Untouchable. Inviolable. Immunity. Impunity. These are the sort of words and expressions that are often associated with senior central bankers, who are, by law, able to operate more or less above the law of the jurisdictions in which they operate.

Rarely heard in association with senior central bankers are words or expressions like “accused”, “charged” or “under investigation.” But in Spain this week a court broke with that tradition, in emphatic style.

As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV (the Spanish equivalent of the SEC in the US).

The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was “unviable.”

Though they have so far only been called to testify, the evidence against the seven former public “servants” looks pretty conclusive. Testifying against them are two of Banco de España’s own inspectors who have spent the last two years investigating Bankia’s collapse on behalf of the trial’s presiding judge, Fernando Andreu. There are also four emails from the Bank of Spain’s inspector in charge of overseeing Bankia’s IPO, José Antonio Casaus, to the assistant director general of supervision at the Bank of Spain, Pedro Comín, that very clearly express concerns about the bank’s “serious and growing” profitability, liquidity, and solvency issues.

Here are four brief excerpts:

  • [April 8, 2011] “Bankia is unviable, both economically and financially. In the end, the FROB [Spain’s state-owned Fund for Orderly Bank Restructuring] will have to convert its debt into shares for the BFA [Spain’s state-owned banking group] and refund holders of Bankia’s subordinate bonds and “preferentes” shares. […] Find a buyer for the group.”
  • [April 14,2011] “This is not working, it’s getting worse. […] Bankia’s capacity to generate resources is deteriorating.”
  • [May 10, 2011, uppercase used by Causus for emphasis] “The endogenous solution put forward by Bankia — a public listing with a double banking structure without the necessary structural changes — WILL NOT WORK AND WILL HAVE A DEVASTATING IMPACT ON TAXPAYERS.”
  • [May 16, 2011, 2 months before the IPO] “The (bank’s) board is highly politicized and unprofessional. It still has the same directors that led the former entities to need public assistance: [they are] discredited in the eyes of the markets.”

As the court’s edict reads, the contents of the emails unequivocally demonstrate that the Bank of Spain’s management was perfectly aware of the “inviability of the group” as well as “the fabricated financial results it had presented.” Yet, together with the CNMV, it lent its blessing to those results, knowing full well they bore no relation to reality .

Featured in the IPO prospectus, those results were crucial in luring 360,000 credulous investors into buying shares in the soon-to-be-bankrupt bank, not to mention the 238,000 people who bought “preferentes” shares or other forms of high-risk subordinate debt instruments being peddled by Bankia’s sales teams as “perfectly safe investments.” Most have since been refunded by Spanish taxpayers.

The IPO prospectus was also signed off on by Bankia’s auditor, Deloitte, whose Spanish representatives are also warming the defendants’ bench. Deloitte was not just the bank’s auditor, it was also the consultant responsible for formulating its accounts. As El Mundo put it, first Deloitte built Bankia’s balances, then it audited them, in complete contravention of the basic concept of auditor independence [read: Deloitte About to Pay for its Spanish Sins?].

Given this deeply compromising, not to say illegal, set-up, it’s hardly any surprise that Deloitte was happy to confirm in Bankia’s IPO prospectus that the newly born frankenbank was in sound financial health, having made a handsome profit of €300 million just before its public launch. It was a blatant lie: in reality Bankia was bleeding losses from every orifice.

Now, just about everybody who played a role in this momentous deception, with the exception of the government itself, is standing trial. That includes 65 former members of Bankia’s management team including its former President and ex-chief of the IMF, Rodrigo Rato, who faces charges of money laundering, tax fraud, and embezzlement.

In his testimony to the court almost exactly two years ago, Rato argued (quite rightly) that the blame for Bankia’s collapse should be much more evenly spread out. Bankia’s public launch “was not a whimsical decision” taken by its chief executives, he said, but was the inevitable result of regulatory changes at the beginning of 2011. According to Rato, the CNMV even played an active role in drawing up the bank’s lie-infested IPO brochure.

Now, two years later, some of Spain’s most senior central bankers and financial regulators find themselves in the rare position of having to explain and defend the actions and decisions they took that helped pave the way to the biggest bank bailout in Spanish history. It will be one of the first times that senior members of the global central banking complex have had to face trial for the consequences of their actions.

That’s not to say that justice will prevail. Spain’s legal system is notoriously slow, especially when it’s convenient, and heavily politicized. There’s also the possibility that the ECB may intervene as it did in Slovenia’s investigation of its central bank’s alleged misuse of bailout funds. The last Spanish judge that dared to take on the financial elite, Elpidio Silva, sent Caja Madrid’s CEO Miguel Blesa to jail — not once, but twice – and was barred from the bench for 17 years. As such, the presiding judge of the current case, Fernando Andreu, would do well to tread carefully; he risks stepping on some very important toes.

Now a hot new bail-in-able debt got cooked up by financial engineers in France. And it’s a big hit. Read…  Biggest EU Banks Embark on the Mother of All Debt Binges

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Peribanu's picture

The trouble with capitalism is that its bankers eventually run out of other people's money.

Olympus Mons is not a Volcano's picture

The trouble with crony capitalism is that its bankers eventually run out of people able to take on dept.

Déjà view's picture

'Pain' In Spain Falls Mainly On The Plain...

CuttingEdge's picture

An interesting aside (for me) is we bought our villa from Bankia at a knock down price (that which covered the failed mortgage of the original buyers).

Only complaint is we didn't get free Spiderman towels.

xythras's picture
xythras (not verified) CuttingEdge Feb 20, 2017 6:59 AM

Spain = village with no dogs (or after this case this case maybe 1 -> the judge). 

Hundreds of Migrants Cross Fence into Spain AGAIN

http://dailywesterner.com/news/2017-02-20/hundreds-of-migrants-cross-fen...

This shows the difference between a WALL and a Fence


CuttingEdge's picture

Thing is - they don't hang around in Spain and aren't given the time of day.

They head for where the streets are paved with "benefit gold" - London, Paris, Berlin, Stockholm et al.

Montani Semper Liberi's picture

Xythras:

 Always near the top of the comments thread-CHECK!

 Always drops a link to his shit site-CHECK!

 Always collects 8 to 10 upvotes from multiple accounts immediately upon posting-CHECK!

 Often leaves an off-topic comment-CHECK!

 TYLER!

 

 

walküre's picture

...as long as the Spanish know that nobody has invited them and nobody will shed a tear when they go missing. We have our own share of useless eaters to look after.

cahadjis's picture

Correct, it was a one-off opportunity and I'm glad you took advantage of it. Buying a property in Spain is always good in the long run, the things that make it popular are everlasting. Nevertheless, the Bankia banksters giving themselves bonuses off the back of the taxpayer is what killed its "good" image....

Hobbleknee's picture

The trouble with capitalism is that it doesn't exist.

GreatUncle's picture

Capitalism ... does not exist ... neither does all the other 'isms like socialism, communism, fascism ... etc. All just convenient words to coerce or deter the behaviour of a population in support the liberal globalist elite = Sorosites.

That liberal tag for elites is starting to look like a fucking lie, can we change it to "murderous", much more apt I do beleive.

iamerican4's picture

Fascism exists, and has since long before Golgotha. The "Pizzagate" pedophile homosexual Caesaropapists and false-Jew Khazars who built their Empire/Church - and its various controlled opposition such as Rabbinical Talmudism's faux-Judaism - on the mass terror of the crucifixions of "tens of thousands" of Christs and Christ Immanuel for twice denying Caesar was God were countered by Whiggism and Adam Smith's invention of Godly Capitalism, enscapsulated in God's foretold "Israel's," the true and prophesied "Zion's" Annuit Coeptis tenet of our credal civil religion, 'divine Providence blesses our righteous endeavors," yet enshrined on The Great Seal of the Covenant.

Rome followed us over with assassins and bankers, executed military conquest in the "Civil War"; nailed their logo, the Fasces to the front wall of the U.S. House, and now - using their 'fake news' and prostitute Ivory Tower - calls Fascism "Capitalism." 

N.B. Tyler please don't kick me out again. I do appreciate your website and can find more e-mail addresses, but censoring the truth of the Anti-Christ now on us America's Founder explicitly identified borders on the unforgivable. This is not a matter of "religion" - my family blood, honored and beloved, is both Roman Catholic and "Jew" (both true and false) - as religion means to "re-connect" with God and the forces at play involve only Satan's attempt to overthrow God and destroy God's Country, America - the only "new nation" "into which all nations of the world flow" and meeting all other given signs by the Hebrew prophet Isaiah for "Israel Restored," God's "Promised Land" others pretend to be via Vatican banker Rothschilds and accursed atheist Herzl.

overmedicatedundersexed's picture

this new Pope is doing nothing to disprove your thesis..sadly

iamerican4's picture

Thanks, but it isn't mine: I got it from Th. Hobbes' "Leviathan" and Th. Jefferson's January 19, 1810 letter to Samuel Kercheval, corroborated by my family's Irish, Huguenot, and America-founding history; personal witness while serving in the Regular Army during Vietnam; and relatives who were, and social contact with, members of the CIA and FBI.

Miss Informed's picture

I American 4 continue the fight for freedom of speech. Double digits may be within your reach.

Mustafa Kemal's picture

"N.B. Tyler please don't kick me out again."

I second that

JRobby's picture

Of course they propose new taxes like a carbon tax to keep the debt train rolling. Blood from a stone comes to mind.

 

MaxThrust's picture

Unfortunately the Crony Capitalists never seem to run out of gullible fools to buy their bullshit.

detached.amusement's picture

The trouble with crony capitalism is that the people eventually lose the ability to take ony any more bankster debt and it comes down to slavery or revolt

 

Had to be restated,   but I took the liberty of editing

TAfool's picture

That's not capitalism.

 

TA

Librarian's picture

I would have thought that there would have been more Michael Douglas fans here on ZH.

I sit corrected.

Catalonia's picture

Spain doesn't even have a central bank anymore. The central bank is in Frankfurt. The whole article is based on a false premise.

Helicopter Rides's picture

No, not really, Spain still have the institution that used to be the central bank, but it's now just a former shell of what it was, it's a pawn of BCE now. The article does not make a single mistake m8

breaktwister's picture

All fiat fractional banking operations are unviable and inevitably devastating for the taxpayer.

nmewn's picture

See, this is where the Clinton's screwed up. If they would have just launched an IPO for their crony-socialist endeavor called The Clinton Fund they could have accepted "donations" from anyone, anywhere in the world and no one would have batted an eye!

But they had to go and call it a...chair-rity...for income tax purposes...now they are running out of other peoples money.

Of course proper estate planning has never been a socialists strong suit ;-)

BorisTheBlade's picture

If they take over twitter prior to IPO, there could be some interesting naming possibilities. They can also finally ban Donald from using the platform or claim harrassment every time he, hmm, touches the keyboard.

Vilfredo Pareto's picture

Why the downvote?

 

Is there one example in history that proves this assertion wrong?

eekastar's picture

No worries. Before shit hit fan, judges be replaced.

Ghost who Walks's picture

The headline looked good but the link to another story painted a depressing picture of Political interference into Spanish Judical decision-making to favour the Government.

The story is noteworthy in comparing what is happening in Sapin to what has not happened or is likely to happen in the major Banking Centers of America and the UK.

I am reminded of a JFK quote "Those who prevent peaceful revolution will make violent revolution inevitable"

It is looking more likely that the Banking Industry will create enough enemies who have been robbed and ripped off, so that the next time an opportunity arises to deal with the Banking Industry, examples will be made of various culpable officials. That will include regulators and Political overseers. Coupled with a severe enough crisis, it will also mean very severe outcomes for those bankers who have pushed past the line of justifiable decision making into the fraud zone.

My takeaway is that there is a trend to hold some bankers accountable. Early days for now.

Vilfredo Pareto's picture

The next time an opportunity arises?

 

That will be the next banking crises.    If we have a repeat of 2008 at a time when most adults still remember the original and how it went down, well if I were a banker I would be heading to my new Zealand bolthole.

 

 

shovelhead's picture

Excuse me if I don't hold my breath waiting for jailed banksters.

exonomic halfbreed's picture

Your thoughts about regulators who perverted justice and need to be brought to task, reminds me of the S.O.B. who was instrumental concerning the denying of manipulation in the precious metals market even though evidence was presented.  Two years or so of study by the highly paid experts regulating precious metal futures (after evidence was turned over and much more later)  resulted in no charges, however the guilty parties have already admitted ciriminal behaviour and are dealing with the horrific hand slapping authorities.  I can not believe that I gave my precious time to this country (eight years of submarine service), where silver spoon youth are taught to look down on their bretheren and lie for the common good (or their own tribe) regardless of the consequences.  We have been lied to continuously, to either blind us to what the oligarchs are doing in our name or justify murderous behaviour by our cold blooded mercenaries in foreign lands.  With the passing of every hour, more and more of us are awakening and that means trouble.  In the past we would gather together and compare notes and then consider reasonable actions to correct the wrongs.  We can not utilize the media (main stream and alternate) for they are government propaganda and nothing more.  I am asking one more time for my fellow americans to do what Michael Ruppert pleaded with you to do.  Approach your neighbors with an idea to have a biweekly block party where ideas from the community could be considered and voted upon such as lobbying.  Only the wealthy communities think lobbying is a good thing.  One other idea to consider is government support for unions is very strong for their own people but they are extremely anti union for civilians.  FDR expressed that government unions made no sense because there is not an honest bargaining in the process.  He felt that it would be inherantly unfair.  I never would have expected that it was JFK that signed off on this travesty of unionizing government employees.  

GreatUncle's picture

Nothing will happen ... it would set a precedent of central bankers being charged all over the EU.

Nope nothing going to happen ...

So why?

In an economic downturn the anger of the people may kill these thieves in retribution so you have a fake trial process, fake prosecution and a slap on the wrist.

Then during the economic downturn they get to say "we were tried in court and paid our dues" to exonoerate themselves no matter how many they were responsible for murdering or killing indirectly.

Seems to be a standard globalist elite ploy to negate future actions.

Sooner's picture

Increasingly clear that NONE of these Bankster clowns can be trusted with paper...GOLD NOW!

Regards,

Sooner.

Miss Informed's picture

Fraud can be produced infinitely. Gold somewhat less.

vesna's picture

In Slovenia nothing happened. People are still payinq 3.4 billion of a bank scaum. Nobody went to prison. Draghi protected all the bankers. BULLLLLL SHIITTTTTT!!!!!!!

 

pedofile faggot's statemant

http://www.times.si/slovenija/draghi-ob-deseti-obletnici-uvedbe-evra-na-...

 

use google scum translate

pparalegal's picture

Aaaannnnnddd...it's gone.

messystateofaffairs's picture

I don't know if they can credibly pull off this many suicides.

Megaton Jim's picture

Jump, you bastards!

Last of the Middle Class's picture

I noticed Home Depot was out of nail guns.  Not good.. . . . .

Brazillionaire's picture

Yeah, how ya gonna step on some toes without a nail gun?

Stef1304's picture

Nice...

I hope the same will happens elsewhere... like for example in the USA, in Germany, in France, in Italy.... ;-)

----_-'s picture
----_- (not verified) Feb 20, 2017 7:57 AM

"Unthinkable Just Happened In Spain"

 

what? they killed all kikes and freed themselves from christianity, communism and islam?

 

if not its not important

Miss Informed's picture

They already tried that but that sort of vermin tends to wiggle back.