Five days before Christmas, ex-Deputy Prime Minister Rodrigo Rato was asked by a prosecutor probing the collapse of Bankia SA whether he’d done business with Jaime Castellanos, chairman of Lazard Ltd.’s Spanish unit.
Spain’s 41 billion-euro ($54 billion) rescue of lenders, prompted by record losses at Bankia, won’t spell the end of troubles for the nation’s financial industry as the economy remains mired in recession.
Private investors in Greek bonds will need to take losses ranging from 40 percent to 60 percent, according to Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies.
The U.K.’s Financial Services Authority today fined UBS AG 29.7 million pounds ($47.6 million) because of former trader Kweku Adoboli’s $2.3 billion trading loss. The FSA said the loss revealed serious weaknesses in management systems and internal controls at the largest Swiss bank.
When the euro was being created, the economics profession split into three groups -- enthusiasts, opponents and realists -- that predicted wildly different costs and benefits for the project. By 2007, when the young currency was thriving, the enthusiasts declared a premature victory. Now it’s the turn of the opponents, and they are, of course, wrong.