Guest Post: Austrian Central Bank Strikes Exotic Deal with PBoC While Entangled in Alleged Kickback Scandal

Tyler Durden's picture

Submitted by The Prudent Investor

Austrian Central Bank Strikes Exotic Deal with PBoC While Entangled in Alleged Kickback Scandal

Austria's central bank, Oesterreichische Nationalbank (OeNB) delivers headlines ranging from opaque to criminal these days.
Market observers scratch their heads about a secretive agreement between the OeNB and the People's Bank of China (PBoC) that makes Austria the first non-Asian country permitted to engage in Renminbi investments with its Chinese counterpart as the intermediary. Further media inquiries were stonewalled.

A terse press release, obviously born in close cooperation with the big Chinese partners, said,

Based on the excellent long lasting contacts between the People´s Bank of China (PBC) and the Austrian central bank (OeNB), the Governors of the two central banks, Mr. ZHOU Xiaochuan and Mr. NOWOTNY Ewald, today signed an important agreement in Beijing. This agreement enables the OeNB to invest via the PBC in Renminbi-denominated assets.

This is the first agreement of this kind signed by the PBC with a non-Asian central bank, and can be seen as an important step in the good relationship between the PBC and the OeNB.

Like every Eurozone country Austria will  pursue every financial help it can get in vain efforts to fend of the inevitable crash of a system laden with unsustainable debts and a hopeless situation in the pension/welfare system, while corrupt politicians only try to secure their own golden handhakes.

Corruption and white collar crime, already widespread in Austria, has reached the central bank's doors too.

Prosecutors currently follow a money trail between Austria, Switzerland and Panama that originated at the - of all places - money printing company OeBS (Oesterreichische Banknoten und Sicherheitsdruck Gesellschaft), a 100% subsidiary of OeNB.

According to latest reports by state TV ORF authorities have taken the 2 former CEOs of OeBS and 2 lawyers into custody. A spokeswoman of the state prosecutor said there are allegations of money laundering and other issues.

Together with other local media reports it appears that the OeBS employees may have developed a kickback system through a Panama shell, Venkoy, that was known to OeNB governor Ewald Nowotny, according to protocols of supervisory board meetings which he led. OeNB had fired the 2 heads of OeSB by October 28 after finding out about the theft and reported the matter to authorities.

Currently the alleged damage is given with €14 million by Austrian media.

Printing Money for Syria

The story gets still juicier. Lawyer Manfred Ainedter, defending one of the detained, threw up more mud and said in a TV interview that the Panama company may have been routinely used as a bribery vehicle. OeBS provides banknotes for countries like Syria and former Soviet republics. The lawyer said further, "that you have to have people on location to secure contracts", suggesting that corruption greases international trade. His argument, that state-owned OeBS only did what private money printers did, does not really help sustain the false hope that money printing is a solution.

As if that were not enough, the central bank of the country - whose "Creditanstalt 1931" 'event' should be a reminder to the exceptions of the 'not possible' situations - threw more light into the lucrative corners of money printing, saying provisions of 20% for deal helpers were a "usual" part of the game. A manager in the Swiss office of Venkoy stated ominously that money was paid, without going into further details.

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fuu's picture

"Oesterreichische Banknoten und Sicherheitsdruck Gesellschaft"

My new favorite phrase.

GeneMarchbanks's picture

When you need to clear your throat?

fuu's picture

I am not sure if die, das, or der is proper.

Ahmeexnal's picture

Yes, I've warned about his for some time.
European countries will dump the euro (this is what Austria has already done) and embrace other currencies (Austria has embraced the chinese currency, Greece will adopt the USD, Italy will reintroduce the Lira or adopt the CHF during a transitory period).

Manthong's picture

Whoa.. somebody smuggled out a secret video of some of the negotiations..

slewie the pi-rat's picture


i would say, maybe...

GeneMarchbanks's picture

Not really surprising.

Here's the finance formula: Fiat + Corruption = Clusterfuck.

Take a step back let it sink in...

Iriestx's picture

Quid pro quo, Clarice.

catch edge ghost's picture

Ok. Now it's real. Far out man. just wow.

Peter K's picture

Disclosing their IB commissions. It's required by MiFID:)

lolmao500's picture

Austria just went rogue, prep the bombers.

I mean Hitler was born there, time for some payback!


catch edge ghost's picture

No really. This is huge. One of the smart guy contributors needs to explain the implications to readers.

It's full of stars!

MarcusLCrassus's picture

We will be seeing a lot of this in the future.  "Stop using those worthless Bernanke Bux.  We'll let you use Yuan instead.  By the way, that's some nice gold you have there..."

goldsaver's picture

That was my first reaction. PBoC has been on a gold buying spree for a few years now. The most obvious purpose would be to establish the Yuan as the replacement for the dollar (what the Euro was supposed to be) as the reserve currency.

Austria investing in Yuan denominated assets translates to using Yuan denominated assets as reserves and dumping dollar denominated assets. Bye, bye Bennybuck!


Put a stake thru its heart, slap its nasty butt and call it Shirley.

sabra1's picture

what kind of bank is Ostritch Nationalbank!

MarcusLCrassus's picture

I heard that it started when a bloke called Archie Duke shot an ostrich 'cause he was hungry.

hound dog vigilante's picture

I think this is HUGE.

Very real & significant step AWAY from the $USD reserve currency paradigm.

Austria is a mature, developed country and their CB chose to deal w/ China's CB - not the Fed.

This is a big move on China's behalf, as well... Mr. Mao's Noodles grand opening right next door to McDonald's (w/ Drive-Thru printing press) on Europe's Hautstrasse.


slewie the pi-rat's picture

 <=== mope with neither hope nor dope

 <=== party like it's "Creditanstalt 1931" 'event' again!

moskov's picture

NO! I think It's not about ending of dollar, but China wants Euro to be crashed and demolished instead. If IMF doesn't want Yuan to be included in SDR, then China does it itself. Give you a finger! IMF and EU

New American Revolution's picture

This is China creating a new reserve currency in competition to the dollar.    And they couldn't have done it without the help of Wall Street, the Federal Reserve Bank they created, and the Washington DC they bought.    Time for the New American Revolution....

Steroid's picture

I guess Austria is not Austrian.

americanspirit's picture

At some point one hopes that the World Court recognizes these bankster games for what they are - crimes against humanity - and starts issuing indictments. After all, killing people by starving them, causing them to commit suicide, destroying families and communities - I could go on, but isn't that about enough for an indictment or two? You certainly don't have to torture and shoot people to commit a crime against humanity. What the banks are doing is easily on the level of a Pol Pot, Idi Amin, or Slobodan Milosovitch.

disabledvet's picture

Under-munchen. They know what comes next.

Tompooz's picture

Next terse press release may be from de Nederlandse Bank and PboC jointly. Clean and without the kickbacks. Some gold will move from NY to HK.

didi's picture

Here's a link to an article from the end of October...preparing the way for these 'exotic' new deals?

Buck Johnson's picture

The bankers are feeding on each other now, because there is no one left but them with money.

Hephasteus's picture

Well US has eaten the post office and every other damn government agency IRA. And Homeland security is thinking people in the post office will fight citizens if the military won't do it.

And corporations aren't making shit for profit so they are just pretending to be kicking ass and having the fed print them money.

PulauHantu29's picture

"No one could be reached for comment."

simonsito's picture

felix austria!
....while I am waiting for that stupid bitch Merkel to do something of the likes for years now! well, i fact I stopped waiting for that....kept a dream in my mind about german-russian-chinese currency/trade cooperations...but thats something for another decade maybe...

Meanwhile in South-Germany, I cant help myself finding more and more 1920ies analogies every day, it almost feels like being on the verge of mental sickness induced by whats happening with those people around me: they know whats coming, and that its not going to be nice at all - but while this is working its way from their guts into their minds, they keep denying furiously everything I say, or just refuse to realize how its going to affect them, yet many usually balanced guys are getting more and more savage in their daily habits in order to secure whats left of the cake before somebody else does, and this shit is going on now for at least since the first german post-war recession in around 2000...I am so sick of it, yet I know its going to get far worse..

..and now there are those illiterate austrian ski-instructors, allowed to save in renminbi (in addition to having lower taxes on PMs and all that - fuck, now I am quite pissed! Theres nothing that bitch can get right!

TheMadNumismatist's picture

One thing that jumped out at me, was the use of CAPITALS in the names of the two signatories; it is as though they are signing as the LEGAL entity, or on a personal basis.