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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: It Begins: One European Bank Fails, Another One Needs An Urgent Cash Injection!

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It Begins: One European Bank Fails, Another One Needs An Urgent Cash Injection!

 

Published: June 12, 2016

http://www.blacklistednews.com/It_Begins%3A_One_European_Bank_Fails%2C_Another_One_Needs_An_Urgent_Cash_Injection%21/51856/0/38/38/Y/M.html

 

Interesting news this week as Belgium-based Optima Bank has been shut down by both the National Bank of Belgium (which also acts as the Belgian regulating body) as well as the ECB. According to the national supervisor, the bank  would have been unable to meet its commitments to its clients and was forced to cease all banking activities after some potentially fraudulent transaction were unveiled.

It’s surprising to see the main media have tried to keep this silent as even the website of the National Bank of Belgium didn’t bother to issue the press release in English (whereas all other press releases on the home page can be read in English). There’s no statement from the ECB either, nor has this news been translated on the English version of website of the state-owned national television station.

The situation is so bad the regulator has already immediately tasked the special fund organizing the Deposit Guarantee Scheme to start paying out the clients of the bank, even though Optima Bank hasn’t filed a bankruptcy procedure just yet. The urgency of the need to pay the clients does indicate the situation is extremely bad and even though it’s a very small one (it had closed the savings accounts division last year), there are two more important things you need to keep in mind.

First of all, Optima was one of the banks which tried to attract new customers with sky-high interest rates. Suspiciously high, we might add. This reminded us of the Deutsche Bank promo in Belgium which also promised ultra-high interest rates on some of its products (as referenced on ZeroHedge here), as Optima clearly had a real need to see a cash inflow.

But secondly, and this is even more important, according to the official filings, the National Bank of Belgium had already effectively taken control of Optima Bank by appointing a ‘special commissioner’ to approve all transactions. Even though the NBB has only revoked the banking license just a few days ago, that special commissioner was already appointed in the first half of May.

That creates a completely new question. Are there other banks in the Eurozone which are under extremely strict supervision by the national (or supranational) regulators? If a Central Bank doesn’t even announce when a special commissioner is being appointed, how can the public be sure its deposits are safe? What else is going on in the Eurozone behind closed doors? Why did Banco Popular for instance need an emergency capital raise if it argued earlier it was strong enough to weather its real estate storm, sending the stock to a multi-decade low?

In fact, Banco Popular was one of the banks that had been definitively cleared by the European Central Bank in its 2014 study which was supposed to have a stricter overview of the entire sector. With one Belgian failing bank and a Spanish bank needing an emergency injection of 2.5B EUR, the credibility of the banking sector in the Eurozone has taken an additional hit, as Banco Popular still has one of the worst bad loan coverage ratios in the eurozone (the total amount of provisions accounts for less than 40% of the total value of the non-performing loans).

If you thought the crisis in the European banking sector was over, think again. Part 2 is just about to start.

 

 

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