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Spain Follows Iceland As Mass Arrests Of Top Bankers Begin

Supreme court charges former head of Spain's central bank

By: Jacky Murphy  |@NeonNettle
 on 21st February 2017 @ 12.54pm
spain has followed iceland s footsteps by charging their top bankers © press
Spain has followed Iceland's footsteps by charging their top bankers

Spain has followed Iceland's footsteps by charging their top bankers for failed Bank leading the loss of Millions of Euros for smaller investors.

Last year, Iceland jailed nine of its top bankers for a total of 46 years for crimes relating to the 2008 economic crash.

Spains Supreme court last year ruled that there was “serious inaccuracies” about listing led investors to back bankia in error, as a result the bank has paid out millions of Euros in compensation.

Freethoughproject reports: This, of course, markedly departs from the mammoth taxpayer giveaway — commonly referred to as the bailout — approved by the U.S. government ostensively to “save” the Big Banks and, albeit unstated, allow the enormous institutions to continue bilking customers without the slightest fear of penalty.

But Spanish authorities could not abide the telling findings of a yearlong investigation into the failed listing, as Wolf Street explains,

“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 [National Securities Market Commission] (the Spanish equivalent of the SEC in the US).

It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV [National Securities Market Commission] (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.’”

As AFP reports, “The National Court validated conclusions made by prosecutors who concluded that when ‘an unviable entity has been listed on the stock market, its administrators or auditor should not shoulder all the responsibility.’”
Specifics of the charges have not yet been made apparent, but as The Economist reports:

1958 The peace symbol, commissioned by Campaign for Nuclear Disarmament in protest against the Atomic Weapons Research Establishment, is designed and completed. The New Yorker publishes its first issue.

“The court is questioning why they allowed Bankia to sell shares in an initial public offering in 2011, less than a year before Bankia’s portfolio of bad mortgage loans forced the government to seize control of it. It said there was evidence the regulators had ‘full and thorough knowledge’ of Bankia’s plight. After its nationalisation, it went on to report a €19.2bn ($24.7bn) loss for 2012, the largest in Spanish corporate history.”

Internal emails and documents played a crucial role in ultimately bringing the central banking officials to task for the failure of Bankia — inspectors bringing issues to the attention of superiors were allegedly ignored. One email cited by the Economist came from an inspector who warned Bankia was “a money-losing machine,” for which an IPO would not solve.

Another report, deemed “devastating by the court,” saw an inspector advise Bankia to seek a private buyer rather than proceed with the listing.
An inquiry into “the participation of other players, such as officials in the central bank,” was also urged by the National Court.

As the Economist points out, Spanish judges are generally reluctant to sentence first-time financial criminals to prison; though five Novacaixagalicia executives had five-year suspended sentences — levied for embezzlement in 2015 — abruptly enforced in January.


Meanwhile, taxpayers in the United States have yet to see Big Bankers criminally responsible for the financial ruin of so many Americans brought to any semblance of justice for their wrongdoing.

tags: Iceland  | Bank

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