The Corporate Bank Run Has Started: Siemens Pulls €500 Million From A French Bank, Redeposits Direct With ECB

Tyler Durden's picture

In a shocking representation of just how bad things are in Europe, the FT reports that major European industrial concern Siemens, pulled €500 million form a large French bank, which is not BNP and leaves just [SocGen|Credit Agricole] and deposited the money straight to the ECB. The implications of this are quite stunning, as it means that even European companies now refuse to work directly with their own banks, and somehow the ECB has become a direct lender/cash holder of only resort to private non-financial institutions! As Bloomberg reports further on the FT story, in total, Siemens has deposited between 4 billion euros and 6 billion euros, mostly through one-week deposits, with the ECB, FT says, cites the person. It isn’t clear from which bank Siemens withdrew its deposits, per the FT... but it is hardly difficult to figure out. BNP Paribas isn’t the bank involved, FT reports, cites unidentified person familiar with the bank. This story should be having far more impact on the EURUSD than any rumors about Greece lying it will fire all of its public workers only to make sure Eurobanks can survive one more day.

More from the FT:

The company’s move came almost a year after Europe’s largest engineering conglomerate prepared itself for a future financial crisis by launching its own bank, an unusual move for an industrial group outside the car sector, where companies run big car financing and leasing businesses.


In an interview last December, Roland Châlons-Browne, chief executive of Siemens’ financial services unit, said its banking business would enable the group to tap the central bank for liquidity and deposit cash at the ECB. 


“In the case of another financial crisis, we will be able to broaden our flexibility and take out risk with our own bank,” Mr Châlons-Browne said at the time.


Siemens does not only use the ECB as a haven; it also gets paid a slightly higher interest rate than it would get from a commercial bank.


The ECB paid an average interest rate last week of 1.01 per cent for its regular offers of one-week deposits, under which it withdraws from the financial system an amount of liquidity equivalent to the amount it has spent on eurozone government bonds.

Update: reader Arnold informs us that Siemens was lucky enough to be the functional equivalent of a Goldman Sachs ATM (you know, Goldman as an FDIC insured "depository" organization) when back in 2010 it got a bank license:

At the end of 2010, Siemens was granted authorization by the German Financial Supervisory Authority (BaFin) to operate banking business in Germany.

Through its loan business, Siemens Bank expands the product range of Siemens’ Financial Services unit, especially in sales financing. In addition, the deposit business of the bank increases flexibility in the area of corporate financing and provides the opportunity for the further optimization of risk management.

Siemens Bank is based in Munich and will be located in Germany only for the time being. Cross-border activities are planned in future. European countries will be the initial focus of such activities. Select emerging markets are additional focal points.

Siemens Bank is a subsidiary of Siemens AG and acts as an independent company. Nonetheless, it profits from its inclusion in the network of Siemens Group’s financial services companies. The bank employs about 100 people, mainly experts from the areas of risk management and risk controlling as well as specialists from loan origination & structuring.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Irish66's picture

market doesn't care

BigJim's picture

And why would they? The ECB will just turn around and use this money to buy bonds... issued by the bank Siemens has just pulled it out of. At 40:1 leverage.

redpill's picture

I'm sure the momos would say the death of SocGen is already priced in.


Until it isn't!

I think I need to buy a gun's picture

turbo timmy was just on bloomberg and everything is strengthened in the united states so there is no need to worry

redpill's picture

Oh good, then it must be a good time to raise taxes by $1.5 Trillion.

macholatte's picture

Back to Basics

Here's the question the sheeple need to start asking......

If X is a sovereign country then it should have the power to coin its own money. So why does it "borrow" anything from anyone?


 No problem can be solved until it is reduced to some simple form. The changing of a vague difficulty into a specific, concrete form is a very essential element in thinking.
J. P. Morgan

Are you kidding's picture

To keep them from coining too much too fast.  It's all borrowed from the taxpayers labor.  It's like the SCOTUS is supposed to keep the laws Congress passes in check.  Theoretically, they would tell the, you've already borrowed too'll have to wait until you've paid that other thing you "just had to have" back first. 

LawsofPhysics's picture

Yep, and none of these banks are undercapitalized, especially BAC.  Now where have I heard this all before?

I think I need to buy a gun's picture

turbo timmy was just on bloomberg and everything is strengthened in the united states so there is no need to worry

Belarus's picture

SocGen: 50x leverage to be exact. 

King_of_simpletons's picture

>> somehow the ECB has become a direct lender of only resort to private non-financial institutions

What is new in this ? We make the rules as we go. Ask the Fed and the last five Treasury Secs.



redpill's picture

Of course is there any real difference in the end?  They won't let SocGen fail.  And I wonder how many execs there have also worked at the ECB, and vice versa?

Careless Whisper's picture

SCGLY   who (besides the boyz from jersey) ever heard of a bank that trades on the pink sheets?

Bwahaha WAGFDSMB's picture

The company’s move came almost a year after Europe’s largest engineering conglomerate prepared itself for a future financial crisis by launching its own bank

 They launched a bank a year ago, that makes them a financial institution.  Increasing their deposits with the central bank could mean they're looking to expand their banking business.  Nothing to see here, move along.

Mr Lennon Hendrix's picture

That's right BigJim.  Let's get the facts straight people- when you trade paper for paper, the status quo remains.  That is, of course, until inflation eats away at the fiat standard.

You want a real run on the system? 


IQ 145's picture

It's a very significant development and good reportage; I reported here a couple of days ago that WSJ Live from London was carrying this as a story; "various, "large; Euorpean corps. removing funding from large French Banks. Giant Sucking Sound. Not good. Possibilitiy market will care big time; waiting and watching.

redpill's picture

Who wants to be the last one out?

tekhneek's picture

How long does it take to print 500 million euros anyway... An hour?

baby_BLYTHE's picture

according to Benocide the ills of too much money printing can be reversed in 15 mins. The initial printing is instantaneous and of no concern to a central banker

macholatte's picture

How long does it take to print 500 million euros


ask Switzerland


Every crowd has a silver lining.
P. T. Barnum

I did everything by the seat of my pants. That's why I got hurt so much.
Evel Knievel

I got a kick out of having a big bankroll in my pocket. Even if I only made a couple hundred dollars, I'd always keep it in fives and tens so it'd look big.
Mickey Cohen

No one is entitled to the truth.
E. Howard Hunt


readytoleave's picture

Yep ---

I knew the big corps were moving their money ---  But i've got to be honest  --- i never thought they would (could) move directly to the ECB.  Where do I sign up for my account at the fed???



Translational Lift's picture

Great place to put your $ if you never want to see it again.......Oh yea...I forgot they print $ don't they!!

Prometheus418's picture

You have to incorporate as a bank- as the article notes Seimens did.

Which is not actually a terrible idea, if you have a lawyer that is willing to arrange it for you.  It is not even necessary to have clients outside of your own family- if you do it correctly, it is possible to incorporate a family bank with FDIC insurance and become a member (however minor) of the Fed.  If you can get that far, you can use the discount window and create your own loans with fractional deposits at the Fed rate- far cheaper than using an outside bank, but you would need to use it enough to justify the legal and accounting expenses associated with maintaining the corporation.

Of course, the odds of getting a 1% reserve are pretty slim if you are not one of the big boys, but even a 25% deposit rate would allow you to print your own money on demand.

All that being said, I would imagine that the process is not as easy as it sounds, and I'm sure you have to have a sizeable amount of capital to begin with.

kito's picture

did they move the money out of fear, or because the ecb is offering higher deposit rates?

Isotope's picture

With the ECB, they get "Europoints." Watch them grow, cash them in for valuable prizes and travel rewards.

Ahmeexnal's picture

I bet even DSK has his money out of french banks.

LeonardoFibonacci's picture

I agree.....NO DOOMSDAY TODAY!!!!

TruthInSunshine's picture

RoboTarder considers today a 0.8% gainer, since the U.S. markets closed 0.8% up off of their intraday lows.

RoboTarder is killing it.

P Rankmug's picture

Neither does the Honey Badger.  It doesn't give a shit.


market doesn't care

Gator8's picture

Cash is Trash, accumulate Gold, next target is 2200 in the short term, medium term 2500!!!!!!! Any Comments appreciated

saulysw's picture

Define "short term" and "medium term"

SheepDog-One's picture

But there was a phone call! Didnt Siemens get the word that all is well?

Mactheknife's picture

Of course all we heard was the Greek version of that conference call...oh yeah somebody cue the riots.

Black Forest's picture

You may call this European Integration.

redpill's picture

Divided we stand and united we fall?  That should be the EU's slogan.

YesWeKahn's picture

Hmmm, I wonder I should deal with ECB directly instead of WFC.

GeneMarchbanks's picture

The story of how SocGen was nationalized... {yawn}

Nate H's picture

also the beginning of the story of how EVERYTHING private (ie for profit) will be nationalized..

NotApplicable's picture

But they had to do something! The childrens!

ZeroPower's picture

How about that ES. Not making anyone in credit much happier today though :/

firstdivision's picture

Credit is happy and running normal.  Equities on the other hand have offically suffered brain damage.

ZeroPower's picture

If by happy you mean generally wider, with ugly spreads, and really small clips going off...then yes. All is not ok in bond-land either.

IQ 145's picture

They're not Canadian Womens; how can they be truly happy ? No seriously; yes.

Long-John-Silver's picture

They should have purchased physical Gold with it. Not one single Bank in the world is safe.

mayhem_korner's picture

Maybe the ECB is their gold broker.

IQ 145's picture

that brings to mind an old English Sarcasm; "And the Best of British Luck to you, Lad". Bout all you could say to someone thought the ECB represented Gold Stabilized Currency.