One can debate whether, by virtue of fractional reserve banking, every bank in the world is just a ponzi scheme, and where the stability of the system depends entirely on the level of counterparty faith and general confidence in the system, in other words, a grand con game in which the central bank is tasked with making sure the con works as planned when confidnce gets "a little low."
One can not debate, however, that a bank had become anything but a pure Ponzi scheme - in this case, a piggybank whose funds were embezzled by its owner as described previously in "Fourth Largest Bulgarian Bank Seized After Bank Run: "Let's Not Tear Down Our House" Central Banker Begs" - when a token review, only upon its faillure, reveals that 87% of its loans were invalid!
- BULGARIA CENTRAL BANK CORPBANK PRE-JUNE REPORTS 'MISLEADING'
- BULGARIA CENTRAL BANK SAYS CORPBANK ASSETS ARE 6.7B LEV
- BULGARIA CENTRAL BANK SAYS CORPBANK AUDIT SHOWED ONLY 13 PERCENT OF LOANS HAD VALID COLLATERAL
Audit report of Bulgaria’s Corporate Commercial Bank, under central bank’s supervision since June 22, shows its assets of 6.66b lev as of Sept. 30 need to be written off by 4.22b lev, central bank in Sofia says on website.
The good news: the level of corruption, embezzlement and loan devastation in a country like Cyprus for example, where the entire banking sector had to be bailed out by Europe, was just a little less than what happened in Bulgaria's fourth largest bank. Actually, it is unclear if that is good news.
The bad news: the Bulgarian central bank "regulator", just like its peers across the continent, and the world, had no idea what the reality of the balance sheet was until the owner vaporized, as did nearly 90% of the bank's funds, to borrow a Corzinism.
But it's ok: remember - all other central banks and regulators have full and unhindered visibility when it comes to the fraud and embezzlement across the other several thousands banks that comprise the European Union. Just like the Fed did when it supervised Goldman and JPM. The only problem is that just like then, so now, nobody dares to do anything, as revealing just how deep the rabbit hole of balance sheet devastation is, goes against the primary directive of every central bank around the globe: preserving faith and confidence in the global fractional reserve banking con game.
As for all those innocent depositors in Bulgaria's Corpbank who believed the Ponzi and con game would last indefinitely: our condolences: you most likely won't ever see a dime of your money, even on the deposits that were supposedly "insured."