BURSA 10.03.2017

Călin Rechea (Translated by Cosmin Ghidoveanu )
 
mărește imaginea
     *  The four big international audit and consulting firms - Ernst&Young (EY), Deloitte, KPMG and PricewaterhouseCoopers (PWC) - have drawn up the most important bailout banking programs
       Nongovernmental organization Transnational Institute (TNI) of Holland recently published an analysis of the costs and losses borne by the European taxpayers for the rescue of some of the important banks in the EU.
     "Between 2008 and 2015, the EU member states, with the approval and encouragement of the EU institutions, have spent 747 billion Euros for various rescue or bailout packages", according to the document "The Bail Out Business", which can viewed at www.tni.org. Aside from these direct expenses, almost 1.2 trillion Euros in guarantees were granted for the debts of the financial institutions.
     But that is not all. The bailout programs also have hidden costs, to the tune of hundreds of millions of Euros, afferent to consulting contracts.
     The four biggest international audit and consulting firms - Ernst&Young (EY), Deloitte, KPMG and PricewaterhouseCoopers (PWC) - have drawn up the biggest bank bailout programs. "Their roles as auditors and consultant have created the circumstances for conflicts of interests", the TNI report states, but in spite of this, "the consultants have often created new contracts, in spite their repeated failures".
     When the auditors and investment banks, that have "supervised" the bailout programs, have not been forced to pay for their "mistakes", the taxpayers have fully paid, through the "care" of their representatives.
     "By October 2016, 213.2 billion Euros of the taxpayers' money have been lost forever following the various bailout programs", the report further states.
     The amount is equivalent to the combined GDP of Finland and Luxemburg, or with the combined financial resources allocated for healthcare in Spain, Sweden, Austria, Greece and Poland.
     The TNI report also includes "case studies" concerning banks in Spain, Greece, Holland, Great Britain and Ireland.
     In the case of Greek bank Eurobank, the estimated loss exceeds 10 billion Euros. This is where we note the preservation of the auditor, PricewaterhouseCoopers (PWC), even after the application of the bailout program, even though "PWC did not issue any warning about the potential risk of the bank prior to the bailout".
     The auditor, this time Deloitte, was also kept when it came to the "saving" of giant Royal Bank of Scotland, where the losses incurred by the British government amounted to 27.6 billion pounds (34 billion Euros).
     The Dutch government lost over 5 billion Euros following the saving of ABN Amro, after injecting 21.7 billion Euros in the bank following its nationalization in October 2008.
     The Bankia financial conglomerate illustrates the situation in Spain, with the losses estimated at 16 billion Euros. Made in December 2010, through the merger of seven regional savings banks, Bankia was managed until 2012 by Rodrigo Rato, former executive director with the IMF.
     In July 2011 an IPO was conducted, in which many of the bank's customers participated, as they were "convinced that the investment is as safe as a bank deposit".
     The bank reported a profit of over 300 million Euros in 2011, the financial result was audit by Deloitte. The nationalization came after less than a year. The audit conducted after the nationalization, by the same company, showed a loss of 4.3 billion Euros in 2011, and "hundreds of thousands of small investors lost their life savings". The Spanish Supreme Court convicted Rodrigo Rato to 4 years and 6 months for the role he played in the Bankia "deal".
     The TNI report includes another interesting section on the financial assistance granted to the German banking system. The beneficiaries were particularly the financial institutions called Landesbanken.
     In 2008, the Berlin government has created a fund for the stabilization of the banking system, which initially amounted to 480 billion Euros. The net loss posted by 2015 was 38 billion Euros, of which 18 billion is represented by the loss generated by the liquidation of WestLB, the biggest of the Landesbanken.
     "Recent studies show that the German authorities have shown great weakness in maintaining discipline among banks, and they have adopted risky practices, because they knew that the state would help them if necessary", the authors of the TNI document state.
     The financial consultants hired by the governments were also "selected" from a very short list. Thus, Lazard handled Bankia, Eurobank and ABN Amro, Rothschild - RBS, while Merrill Lynch drew up the program for Anglo Irish Bank.
     Unfortunately, the saga of saving European banks at any cost, is far from the end. A recent editorial by Bloomberg brings arguments in support of creating a continental-level "bad bank", following the proposal of the European Banking Authority (EBA) and the European Stability Mechanism (ESM), amid a combined value of non-performing loans of approximately one trillion Euros.
     The arguments are not solid at all, however, especially if we consider the disaster presented in the TNI report. The only "achievement" of such a bad bank would create an unprecedented bad bank without a historical precedent and the socialization of losses that no one will answer for.
     And among the biggest winners will see the big audit firms, who basically have an oligopoly on the market (author's note: a situation where the market is controlled by a very small number of suppliers, while a large number of consumers exists).
     "Companies that should have assured investors and the regulatory institutions that banks are stable and they are maintaining their market domination, despite the serious mistakes in assessing the credit risk", is the conclusion of the TNI report, which also reminds that a number of measures have been taken to eliminate conflict of interest.
     But these measures are almost ineffective when it comes to the resolution of another major problem: "the dependence of governments and EU institutions on the Big Four".
     Additional, stricter regulations on the audit and financial consulting sector won't have the desired effect either, as demonstrated by the total ineffectiveness of the bank regulations when it comes to the prevention of financial crises.
     A robust solution cannot lack the measures to increase competition in the market and a strict framework for the establishment and the taking of material and criminal responsibility by those guilty for the bankruptcy of banks or for the inaccurate audit reports.
     Unfortunately, with the way the situation is evolving on a European level, such a solution will never be accepted and only a collapse of the Eurozone can stop the Ponzi scheme "shepherded" by the European Central Bank 
 

 
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Aceeasi sectiune (English Section)
AFTER BEING INVESTIGATED BY THE TAX ADMINISTRATION AND THE ANPC, BANKS GET INVESTIGATED BY THE COMPETITION COUNCIL
THE COURT RULED THAT SOME CONTRACTS CONCLUDED BY CELL PHONE COMPANIES INCLUDE ABUSIVE CLAUSES
AFTER THE TRANSACTION BETWEEN BANCA TRANSILVANIA AND BANCPOST
PATRICIA SUÁREZ RAMÍREZ, THE PRESIDENT OF THE ASSOCIATION OF FINANCIAL CONSUMERS OF SPAIN:
THE QUICK RISE OF THE INDEX WHICH SETS THE TREND FOR INTEREST RATES ON LOANS DENOMINATED IN LEI ISN'T STOPPING
THE PARLIAMENT IS ASKING FOR INFORMATION CONCERNING THE INVESTIGATIONS WHICH OMV PETROM HAS BEEN SUBJECTED TO
Actualitate - vezi toate știrile mai jos.
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Internaţional, 08:15
LA MIJLOCUL ȘEDINȚEI,
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     * ADEVARUL
     * La căpătâiul Regelui. Câteva secunde, ca să ajungă toată lumea
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English Section
12.12.2017
AFTER BEING INVESTIGATED BY THE TAX ADMINISTRATION AND THE ANPC, BANKS GET INVESTIGATED BY THE COMPETITION COUNCIL
     * Chirițoiu: "We suspect an exchange of sensitive information on the banking market"
     * Dan Suciu, NBR: "The audits of the Competition Council can't be a reason for panic whatsoever"
     * Unannounced audit at Finmedia
     * The investigated institutions are at risk of being fined 10% of their turnover
     * Vasilescu: "The NBR has nothing to do with these investigations"
       The financial banking system seems to be the focus of most of the investigation entities. After being audited by the National Tax Administration Agency (ANAF) and by the National Consumer Protection Authority (ANPC), some of the banks which operate in Romania have also been investigated by the Competition Council (CC).  details
11.12.2017
THE COURT RULED THAT SOME CONTRACTS CONCLUDED BY CELL PHONE COMPANIES INCLUDE ABUSIVE CLAUSES
     * The Bucharest Court of Appeal Bucharest yesterday ruled that RCS&RDS has abusive clauses in its contracts
     * The ANPC has also won the initial lawsuit against Telekom România
     * Vodafone has lost the case in the court of last instance against the ANPC
       The Courts have decided that some contracts concluded by the telephony companies contain abusive clauses. The Court rulings were rendered last year, as well as in 2016, but the argumentations have been formulated relatively recently.  details
08.12.2017
     The hope of an accession as quick as possible by Romania to the Eurozone was dealt a heavy blow precisely on the National Day.  details
06.12.2017
AFTER THE DRAFT HAD BEEN PUBLISHED IN OCTOBER
     * Gheorghe Șimon: "The royalties law will be voted in the Parliament in February next year"
     * Ministry of the Economy: "We will establish royalties which are fair both for the state as well as for the business sector"
     * Daniel Cătălin Zamfir, PNL: "I found out that there are companies that have never, take note, never paid even one leu in royalties to the Romanian state, even though they have been exploiting resources for over 20 years"
     * Last year, the Court of Auditors announced that Romania lost 1.4 billion dollars, because the ANRM established the oil royalties in a flawed manner
       The entire legislative package concerning the regulation of the system for the regulation of the mineral, oil and hydromineral resources will be revised and will be voted in the Parliament in February next year, Economics minister, Gheorghe Șimon, announced yesterday, after the debates of the Economic, Industries and Services Commission of the Senate.  details
28.11.2017
AFTER THE TRANSACTION BETWEEN BANCA TRANSILVANIA AND BANCPOST
     * Customers with borrowers in CHF from Bancpost are waiting for a conversion program with a discount
       After moving to second spot last year in the domestic banking system, through the acquisition of Volksbank, Banca Transilvania (BT) ends up on equal footing with BCR, taking over Bancpost, from Greek group Eurobank.  details
27.11.2017
     * MAKE, BURSA: "I want the new CEO of the BSE to participate in the drafting of a new strategy for the development of capital market"
       On Thursday night, "BURSA" received the Award for the promoting of high standards of corporate governance on the capital market, as part of the 2017 Capital Market Awards Gala, organized by the Association of Brokers.  details
24.11.2017
     * Ciprian Păltineanu and Adrian Tănase, scheduled for meetings with the board
     * Both candidates seem to be closet o the group in the shareholder structure of the BSE
     * George Butunoiu is in charge of recruitment
     * The waiting list may include a few foreigners, including former BRD executive Jacek Panczyk
       According to some market sources, banker Ciprian Păltineanu and Adrian Tănase, Chief Investment Officer at NN Pensii România, will hold interviews in the beginning of next week with the Board of the BSE, after Ludwik Sobolewski's term expired in the summer.  details
23.11.2017
PATRICIA SUÁREZ RAMÍREZ, THE PRESIDENT OF THE ASSOCIATION OF FINANCIAL CONSUMERS OF SPAIN:
     * The head of the ASUFIN: "The ruling of the Supreme Court of Spain in which the Andriciuc case has been invoked will be part of the Spanish case law and the lower courts will be required to apply the principle that underlies this decision"
       The ruling issued by the Court of Justice of the European Union (CJUE) in the Andriciuc versus Banca Românească case represents a great advantage for Spanish debtors, said Patricia Suarez Ramírez, the president of the Association of Financial Consumers in Spain (ASUFIN), as part of a response recently sent to BURSA.  details
22.11.2017
     * Dragnea: "Those who are against me are hiding behind institutions"
       The president of the Chamber of Deputies, Liviu Dragnea, leader of the PSD, thinks that his enemies are hiding behind some institutions, "they crucify people", and the real stake is "the blocking of the Laws concerning the Justice system".  details
21.11.2017
     The Council of the European Union and the European Parliament have sent to the ECB, in the beginning of this year, a request concerning the sending of some proposals to revise the framework for managing crises.  details
20.11.2017
ANPC STRIKES AGAIN
     * BCR: "Ongoing contracts no longer contain the clauses that have been subjected to examination"
     * Sources: "ANPC has 6 lawsuits against BCR, which will lead to enormous losses for Erste Bank if BCR loses in court"
       After forcing Raiffeisen Bank to eliminate the unfair practices from the loan agreements, the National Consumer Protection Authority (ANPC) strikes again, this time the biggest bank in the system. BCR lost in the court of first instance, against the ANPC, in a class action lawsuit concerning abusive lending clauses.  details
16.11.2017
THE QUICK RISE OF THE INDEX WHICH SETS THE TREND FOR INTEREST RATES ON LOANS DENOMINATED IN LEI ISN'T STOPPING
     The 3-month ROBOR rate, which is used to calculate the interest rates, the majority of the loans denominated in lei, has jumped past the 2% psychological level, and yesterday reached 2.06%, up from Tuesday's 1.92%, according to data from the NBR.  details
16.11.2017
THE PARLIAMENT IS ASKING FOR INFORMATION CONCERNING THE INVESTIGATIONS WHICH OMV PETROM HAS BEEN SUBJECTED TO
     * Minister Toma Petcu, former ministers Răzvan Nicolescu and Victor Grigorescu, the representatives of the state in the executive structure of OMV Petrom and Mihai Busuioc, the president of the Court of Auditors were heard today in the Investigation Commission
       The executives of OMV Petrom mentioned, in a letter addressed to the parliament, the existence of four lawsuits brought by the National Energy Regulation Authority (ANRE) and of seven audits by the Authority, between 2012-2017, as the recent request for information by the Commission for the Investigation of the activity of the ANRE targeted a period of 12 years, from 2015 to 2017.  details
14.11.2017
THE EURO AT AN ALL-TIME HIGH
     * Vasilescu: "We cannot say that the currency market has gone off the rails, the exchange rate has moved 4 bani in 4 days"
     * "Perhaps it is a simple coincidence the fact that on November 8th was approved the Emergency Ordinance of the Fiscal Code and it was also on that day that the Euro rose past 4.6 lei", said Mr. Vasilescu
       The leu yesterday reached a historic low against the Euro, 4.6495 lei/Euro, up 1.05 over the previous meeting, marking the fourth day where the exchange rate was above 4.6 lei.  details
13.11.2017
     In October, the Romanian Commercial Bank, through Schoenherr și Asociații, has submitted, with the County Court of Bihor, a request for the insolvency of the European Drinks group, owned by the Micula brothers. That group includes: European Drinks, Transilvania General Import-Export, European Food, Starmill SRL, Scandic Distilleries SA, Rieni Drinks.  details
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