{"id":4009,"date":"2015-03-19T06:41:50","date_gmt":"2015-03-19T04:41:50","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=4009"},"modified":"2015-03-19T06:41:50","modified_gmt":"2015-03-19T04:41:50","slug":"banco-madrid-el-corralito-temerario","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/banco-madrid-el-corralito-temerario\/","title":{"rendered":"Banco Madrid or the reckless corralito"},"content":{"rendered":"

\"\"Banco Madrid is the first bank that the state and its regulators have let fall in this galloping debt crisis. In fact, technically speaking, it has not been allowed to fall, i.e. it has not fallen due to the absence of a bailout with state funds, as other insolvent institutions have been rescued in recent years, but rather, forceful measures have been taken to liquidate it due to its -still- alleged money laundering. What is paradoxical is therefore that the reason for the intervention and the swift liquidation of the institution is not, at least originally, due to the feared insolvency but to criminal practices of great significance.<\/p>\n

However, there is no shortage of conjecture pointing to other motivations of a less financial or political nature, as suggested by this article from ElConfidencial<\/a>,this one from lasfinanzascambian.com<\/a>\u00a0or such an authoritative voice as Javier Cremades, chairman of Cremades & Calvo-Sotelo and president of the International Financial Litigation Network (IFLN<\/a>) in this devastating article<\/a>. In fact, it is strange, to say the least, that the report of the Sepblac<\/a>\u00a0to remain in Minister De Guindos' drawer<\/a> The report had already warned of indications of various laundering offences before the Anti-Corruption Prosecutor's Office, which had not been processed until the USA demanded that action be taken. We are not therefore dealing with crimes or malpractice that have gone unnoticed until today, but rather with suspicions and indications that the competent bodies detected as early as June last year, but which they surprisingly ignored until the US financial police have come forward. A symptom of the fact that the application for insolvency proceedings is more the result of a decision taken by the government and regulators than of financial urgency, is the fact that the examining magistrate himself has decreed<\/a>\u00a0the suspension of the insolvency proceedings, obliging the FROB to decide whether to rescue the bank (as it has been doing until now in the face of insolvencies) or to liquidate it. And oh surprise, it has decided to liquidate it and not to rescue it or resolve it. Why? Well, the reasons given are as generic and vague as \u00abthe requirements are not met<\/a>\u00bbIn any case, the bank is evicted, either through insolvency or delinquency (or both), but the figures that the bank apparently had are surprising. Of course, either these were false, or the blocked clients are very likely to recover a good part of their savings beyond the 100,000 euros guaranteed by the Deposit Guarantee Fund<\/a>\/State.<\/p>\n

\"\"<\/p>\n

Whatever the responsibility of bankers, politicians and regulators, the reality is that any suspicion of criminality must be nipped in the bud, especially in matters of money laundering, since by being guilty, complicit or simply looking the other way, the damage done is incalculable. Now we will see if the regulators show their diligence in clarifying the facts and in unblocking the assets of the entity, which is still hermetic to this day. So hermetic that it has not yet been possible to transfer even the funds of third parties or securities such as shares, bonds, etc. deposited in the entity, despite the fact that, as is well known, these enjoy the right of separation from the bank's balance sheet, and Banco Madrid only exercises the role of mere custodian over them. Let us therefore hope that the regulators act diligently and swiftly, because if the corralito is prolonged beyond what is legal\/necessary and\/or the Deposit Guarantee Fund hesitates, we will have a bonfire on our hands in the middle of a dry, very dry forest. It's not the right time for a bun, as they say, in other words, the balance sheets of the banking sector are not in such a state as to generate more doubts among depositors. Let us not forget that this corralito, for the moment localised, has occurred in an investment bank, i.e. with hardly any loans or mortgages and with an audited and apparently very solid balance sheet. If an (allegedly) solvent bank is (allegedly) knocked down in 48 hours by a wave of repayments, what can happen to other much less solvent institutions if customers start to withdraw their money, even if only incipiently?<\/p>\n

Of course, the fragility of today's banks in the face of any incident that generates distrust on the part of customers is chilling. We already had the clear example of what happened in Cyprus, where only assets such as investment funds and third-party securities deposited in its banks were saved from collapse. Today we are also seeing how only Banco Madrid customers with third-party funds and securities deposited in that institution will be able to recover them without any further concern than the initial blockage. For their part, participants in funds and sicavs managed by BMadrid's fund manager will have to queue up while waiting for the fund manager to become operational again - probably sold to a third party - and liquidate the assets in some order to deal with the massive redemptions. And finally, holders of deposits and other bank products will have to queue up with the bank's creditors for amounts exceeding 100,000 euros, which are guaranteed by the Deposit Guarantee Fund (FGD).<\/p>\n

Here it is important to remember the Gurusblog post<\/a> in which he warns that the published accounts of the FGD showed a negative net worth of -1,637 million \u20ac in the 2013 financial year. In other words, bank insolvency accompanied by the insolvency of its guarantee fund, as we have been fearing and warning for some years now. The said body has hastened to say that in 2014 significant provisions were made and that there will be no problem in meeting the guarantees of Banco Madrid's depositors. Furthermore, the State is also subsidiarily liable, so there is no doubt that they will compensate up to 100,000 euros of the depositors of Banco Madrid in the coming weeks, because if they take longer they will be playing with fire. The question that all those who continue to entrust their savings in deposits and banking products should ask themselves is what would happen in the event of a second insolvency or criminal closure of another larger and\/or less solvent institution? And a third?<\/p>\n

We will never tire of repeating the warnings about the dangers of lending our money to banks, because that is what we do when we leave money in current accounts, deposits or other products so kindly sold to us by the manager on duty. We should always be invested in the best investment funds from independent managers, far from the banking and sovereign risk of over-indebted countries such as Spain or the rest of the European periphery. Our money should be off the banks' balance sheets, because as we can see today, the risk of a run on the banks can happen at any time and for any reason. The banking balance is so fragile that we should only use banks as mere intermediaries and custodians of our investments. Our money should be in the best international funds of independent asset managers and with strategies away from today's fixed income risk<\/strong><\/a>. And if we also invest from squares and banks such as those in Luxembourg<\/a>, <\/strong>with full fiscal transparency of course, we can achieve a 10-fold increase in the investment universe to which we have access, as explained in several articles above.<\/p>\n

In the end, let's hope that Banco Madrid is just an isolated accident in the Spanish banking sector and not a chain reaction. And to avoid this, regulators and politicians (it is becoming increasingly difficult to distinguish between them) must act quickly, normalise the situation and restore confidence in the banks as a matter of urgency.<\/p>","protected":false},"excerpt":{"rendered":"

Banco Madrid es el primer banco que el Estado y sus reguladores dejan caer en esta crisis de deuda galopante. De hecho t\u00e9cnicamente no se le ha dejado caer, es decir que no se ha ca\u00eddo por la ausencia de un rescate con fondos del Estado, como se ha venido rescatando\u00a0en los \u00faltimos a\u00f1os a […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,51,45,39,40,52,37,48],"tags":[],"class_list":["post-4009","post","type-post","status-publish","format-standard","hentry","category-actualidad","category-banca","category-asesoramiento-deportistas-artistas","category-crear-mi-propio-family-offices","category-gestion-financiera","category-asesoramiento-patrimonial-multi-family-office","category-reflexion","category-asesoramiento-patrimonial-multi-family-office-crear-mi-propio-family-offices"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/4009","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=4009"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/4009\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=4009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=4009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=4009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}