AUSTRIA: DISASTER IN THE PAST, PRESENT & FUTURE AS HYPO BAD BANK HETA COLLAPSES
When a company trading in asset resolutions resolves not to be insolvent, it’s a bailin. Why Mario Draghi and German banks are really to blame. How the Austrian Government lied about the real situation.
Once upon a time there was a AAA, badly-run Austrian bank – a whopper – called Hypo. But then a German shareholder Bayerische Landsbank gave out some idiot loans in the Balkan States, and the Bavarian subsidiary stepped neatly out of the way just before the solids hit in 2009. So Hypo became a broke bank thanks to a naughty German bank, and the Austrian Government bailed it out.
As is the custom in these circumstances, a ‘bad bank’ was created. A naughty bank is different to a bad bank, in that the NB sprays merde everywhere, and it’s all tucked away into the BB.
The clue’s in the name when it comes to bad banks, but until quite recently this one – Heta – was rated AAA Aaa by some ratings agency somewhere of dubious ownership. So not surprisingly, lots of money piled into Heta.
Of course, some small change to the tune of 5.5bn euros had been needed to set up Heta and write off the ordures. But everyone seemed to be quite happy with the way things were going. Until yesterday.
Because yesterday, “the first results of an asset review suggested a dramatic change in the asset evaluation”. Don’t you just love financespeak? They ‘reviewed’ the assets, and lo, there had been a change, and so the managers were sore afraid. The ‘evaluation’ of the assets showed a great big hole to the tune of 7.6bn euros.
More €uroballs here:
https://hat4uk.wordpress.com/2015/03/02/austria-disaster-in-the-past-present-future-as-hypo-bad-bank-heta-collapses/