Bank Goes Bust: Investors to Lose Money

Generali

http://www.telegraph.co.uk/finance/comment/jeremy-warner/11455671/Austria-is-fast-becoming-Europes-latest-debt-nightmare.html

It was the failure of Creditanstalt, a Viennese bank founded in 1855 by Anselm von Rothschild, that arguably sparked the Great Depression, setting off an unstoppable chain reaction of bankruptcies throughout Europe and America.

No-one would think that what happened last week at Austria’s failed Hypo Alpe-Adria Bank International falls into quite the same category; we are meant to be in the recovery phase of the latest global banking crisis, so this is more about re-setting the system than again bringing it to its knees, right?

Well, make up your own mind. I suspect neither financial markets nor policymakers have yet caught onto the full significance of the latest turn of events.

In a nutshell, the Austrian government has had enough of funding the bank’s losses, and announced plans to “bail-in” external creditors to the tune of €7.6bn instead.

My feeling is that the Torygraph is getting a bit carried away here. This may well lead to banks having to pay a fair bit more for borrowing though.

michaels

Weren't depositors already hit in Cyprus?

Generali

michaels wrote: »

Weren't depositors already hit in Cyprus?

It's bondholders that are being hit here. It's AFAIK the first use of the laws to allow bondholders to be bailed in.

purch

Generali wrote: »

It was the failure of Creditanstalt, a Viennese bank founded in 1855 by Anselm von Rothschild, that arguably sparked the Great Depression

You see, more proof that THEY are behind everything :eek:

purch

Sounds very much like they are trying to find a back door way to make the Germans pay.

Bayerische Landesbank, once the most triple A of all triple A Banks !!!!

Generali

purch wrote: »

Sounds very much like they are trying to find a back door way to make the Germans pay.

Bayerische Landesbank, once the most triple A of all triple A Banks !!!!

IIRC, their moment in the sun went when the EU declared the subsidies from the Lande to the Landesbanken to be illegal.