bankia fraud case could set off political fireworks€¦ · according to law firm cremades &...

Facebook Twitter RSS YouTube

Follow Reuters

MORTGAGE HOME EQUITY SAVINGS AUTO CREDIT CARDS

KEY RATES

See today's average mortgage rates across the country.

TYPE TODAY 1 MO

30-Year Fixed 3.65% 3.64%

15-Year Fixed 3.03% 2.99%

10-Year Fixed 3.27% 3.14%

5/1-Year ARM 2.79% 2.68%

30-Year Fixed Refi 3.61% 3.72%

15-Year Fixed Refi 3.02% 3.11%

5/1 ARM Refi 2.78% 2.86%

30-Year Fixed Jumbo 4.21% 4.27%Rates may include points.

SOURCE: BANKRATE.COM

SEE MORE KEY RATE DATA

Share this

0

Email

Print

Related News

UPDATE 5-Spain opens fraud case on ex-Bankia chief RatoWed, Jul 4 2012

Spain opens fraud case on ex-Bankia chief RatoWed, Jul 4 2012

HIGHLIGHTS-EU finance ministers' commentsFri, Jun 22 2012

Spain may need 62 billion euro to rescue banksThu, Jun 21 2012

Insight: The power brokers with Europe's fate in their hands: Ivan AyalaWed, Jun 20 2012

Analysis & Opinion

Plenty of room for wrangling over Spanish recaps

Do women hold the key to having it all?

Related Topics

M&A »Bonds News »Bonds »Markets »Financials »

Bankia fraud case could set off political fireworks

Recomendar 3 personas recomiendan esto.

By Sarah White and Sonya DowsettMADRID, July 5 | Thu Jul 5, 2012 12:32pm EDT

(Reuters) - Investigations into Spain's bailed-out Bankia are descending into the political nightmare top parties had sought to avoid, with a fraud probe set to lay bare their role in a banking mess that has crippled the country.

A Spanish court this week opened a fraud case against former Bankia executives, including ex-chairman Rodrigo Rato, a one-time IMF chief and Spanish government minister, putting regulators and the Bank of Spain under scrutiny too.

The 23.5 billion euro ($29.4 billion) state rescue of Bankia in May, which pushed Spain to request European aid for its banks, was already embarrassing for mainstream political parties with deep ties to the lender and its former management.

Bankia was formed from seven regional savings banks, including heavyweight Caja Madrid and Valencian-based Bancaja, in 2010 as part of a government-driven programme to reduce the number of Spain's unlisted savings banks, or 'cajas'.

Many board members at Spain's cajas either had connections to political parties or had served in government, and drove investment decisions during the country's boom years that eventually turned to bust.

"It was a decades-long intermingling of local, political and business interests that was systematic in many regions," said David Bach of the IE Business School in Madrid. "Many of the failed investments were driven by political agendas: the cultural centres, the regional airports."

Bankia's own ties with the centre-right People's Party (PP) now in power could come back to embarrass the government of Prime Minister Mariano Rajoy.

Rato, ousted shortly before Bankia's state takeover, is a PP stalwart - a former finance minister when the party was last in government who commands influence with ministers in power now.

He took over as head of Caja Madrid in 2010 from Miguel Blesa, a friend of former PP prime minister Jose Maria Aznar, and was the natural choice to head the merged group when Bankia was formed later that year.

Rato ran head to head with current Economy Minister Luis de Guindos for the top Caja Madrid position, and there is no love lost between the two men, a former colleague of Rato at Bankia said.

Rato oversaw Bankia's stock market listing in July 2011, when thousands of ordinary Spaniards were encouraged to buy shares, only to see their investments virtually wiped out as worries about the bank's health battered the share price.

ARTICLE

Home Business Markets World Politics Tech Opinion Breakingviews Money Life Pictures Video

Login or register Latest from My Wire

EDITION: U.S. Search News & Quotes EnviRegister Sign In

of 4Bankia fraud case could set off political fireworks | Reuters

20/07/2012http://www.reuters.com/article/2012/07/05/spain-bankia-politics-idUSL6E8I52XV20...

READ

DISCUSSED

WATCHED

'Emotional' android shows new face of robotics Wed, Jul 18 2012

Obama condemns attack on Israeli tourists Thu, Jul 19 2012

Amateur video appears to capture Damascus clashes Thu, Jul 19 2012

M&A BONDS NEWS BONDS MARKETS FINANCIALS

Tweet this Link this Share this Digg this Email Reprints

More From Reuters Corn crop shrinking by the hour Armed gang rapes women in Mexican youth camp UPDATE 2-U.S. taps clearinghouses for tough new rules U.S. refinery shutdowns - Petrobras, Citgo, Shell Exclusive: Banks in Libor probe consider group settlement-sources

From Around the Web The Best Kept Secret of Trading; The 10:00 am Rule (eToro Education) Millions of Android Users Switching to Apple's iPhone, Not Samsung's… (Benzinga)

The 10 Worst Airport Terminals (Frommer's) The core newspaper business is dying, but GCI has hope (InvestorPlace) iPhone 5: fresh snaps reveal taller design & larger screen (uSwitch.com)

[?]

Videos From Reuters From Around the Web

Some PP members made a show of support for Rato after the accusations, playing down the significance of the case.

"He should know that friendship and personal relationships don't change because of these things," Spanish foreign minister Jose Manuel Garcia Margallo said on Thursday.

The PP had already quashed calls for a parliamentary investigation into the Bankia bailout, b ut a judge opened the case af ter a small political party brought a claim. (I n Spain, judges have investigative powers similar to prosecutors in other legal systems.)

AFTER GOD, BANKIA

The judicial investigation could be damaging for socialists in opposition too. Like the PP, they had several ex-party mayors and councillors on the board of Bankia that are under investigation.

The Socialist government drove the tie-up between the seven banks to form Bankia. The pairing of Caja Madrid with Bancaja - loaded with rotten loans to real estate developers along Spain's Mediterranean coast - now clearly appears to have been a mistake, said two former Bankia board members.

The Socialists were also in power when Bankia embarked on an aggressive marketing campaign on television and in bank branches designed to persuade citizens to buy the stock in the July 2011 initial public offering.

The plight of small shareholders has become the source of much public anger, a nd claims by a group of 400 of these investors will be added to the judicial fraud investigation in coming days, according to law firm Cremades & Calvo-Sotelo.

Some of these investors claim they were not adequately warned of the risks when they were sold shares in Bankia - a process the Bank of Spain, headed at the time by a Socialist party member, should have at least in part been overseeing.

"They told us that after God, there was nothing better in the world than Bankia shares," said Roberto Oscar Vetere, 59, who invested about 3,000 euros in Bankia stock on the advice of his local bank manager in Valencia.

Vetere, an Argentinian who fled his own country's banking problems 10 years ago, said he blamed politicians and the bank's executives for Bankia's woes, but said he was not interested in seeing them behind bars.

"I want to see them face up to people and say 'we got it wrong'", he said.

Bankia shares have fallen 76 percent since listing.

The sales process around the initial public offering will probably be a key part of the probe. International investment banks that advised on the sale have so far not been dragged into the case, although scrutiny is growing on their role too.

Recomendar 3 personas recomiendan esto.

Agriculture Secretary tells White House drought getting worse18 Jul 2012

1

Syrian borders in rebel hands, battles in Damascus

| 5:00am EDT

2

NYC's jobless rate hits 10 pct in June, though jobs added19 Jul 2012

3

U.S. banks haunted by mortgage demons that won't go away19 Jul 2012

4

TV host Fred Willard fired after lewd conduct arrest19 Jul 2012

5

Obama allies tell Romney to ”quit whining” about Bain attacks127

Syrian battles rage in capital, Russia pressed116

No sign of Assad after bomb kills kin, rebels close in99

Pink diamond can now be admired by all (0:44)

Shark kills surfer in Western Australia (1:15)

The Best Kept Secret of Trading; The 10:00 am Rule (eToro Education)

Google, Microsoft Beat Estimates, Announce Rising Revenue (Benzinga)




ADS BY MARCHEX

Forex Trading - GFT Free $5,000 Demo Account. Try it Now With GFT. GFTforex.com

Buy a Link Now

Comments (0)

This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

CONTINUE READING

Syrian borders in rebel hands, battles in Damascus AMMAN/CILVEGOZU, Turkey - Rebels seized control of sections of Syria's international borders and torched the main police headquarters in the heart of old Damascus, advancing relentlessly after the assassination of President Bashar al-Assad's closest lieutenants. | Video

TOP NEWS

Ten killed in Denver movie shooting: local radio DENVER, Colorado - A masked gunman shot dead 10 people and wounded 30 to 40 others at a showing of new Batman movie "The Dark Knight Rises" at a movie theater in the U.S. city of Denver, local radio station KOA reported on Friday, citing witnesses.

Eurogroup to approve Spanish banking sector bailout

Panetta orders Pentagon to monitor media for information leaks

» More Top News

TOP VIDEOS

Google+ growth spurt

Knocking hard on Apple's door

» More Top Videos

MOST POPULAR

Syrian borders in rebel hands, battles in Damascus |

Exclusive: Kim to reform North Korean economy after purge - source

Ten killed in Denver movie shooting: local radio

Agriculture Secretary tells White House drought getting worse

NYC's jobless rate hits 10 pct in June, though jobs added

Grain prices set records as U.S. drought, food worries spread

ANALYSIS & OPINION

Picking the right one for RomneyBy Jack and Suzy WelchA great person in the No. 2 spot can make the person at No. 1 decidedly stronger, smarter and more

effective. So how should Romney choose his VP? We've put together a scorecard that rates each candidate against six essential criteria. Commentary

Kaletsky: A German euro exit could be easy

» More Analysis & Opinion

TODAY IN PICTURES

View Slideshow

Editor's Choice Our best photos from the last 24 hours.

US Indices

DOW34.6612,943.36+0.27%

NASDAQ23.302,965.90+0.79%

S&P 5003.731,376.51+0.27%

TR US INDEX0.32124.43+0.26%

Int'l Indices

» Markets

NIKKEI8,669.87

HANG SENG19,640.80

MARKETS

Back to top

Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index

Legal Bankruptcy Law California Legal New York Legal Securities Law

Support & Contact Support Corrections

Account Information Register Sign In

Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile

About Privacy Policy Terms of Use AdChoices Copyright

Thomsonreuters.com

About Thomson Reuters

Airbus brings the fight to Boeing (2:20)

Man jumps overboard after seeing brother’s killer on… (Inquirer.net)

[?]

EDITION: U.S.




Our Flagship financial information platform incorporating Reuters Insider

An ultra-low latency infrastructure for electronic trading and data distribution

A connected approach to governance, risk and compliance

Our next generation legal research platform

Our global tax workstation

Investor Relations

Careers

Contact Us

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.




bankia fraud case could set off political fireworks€¦ · according to law firm cremades &...

Documents