The opinion of the parliamentary commission of inquiry into the banking crisis includes a conclusion that has gone unnoticed to date, and that weakens the position of the Banco de España in the trial of Bankia. The opinion has not yet been made public, but the conclusions are dedicated to Bankia, the parliamentary commission approved this charge: “The Bank of Spain committed a serious irregularity of dire consequences by enabling Caja Madrid, Bancaja and five other cajas in the so-called SIP [Institutional System of Protection] post of unique shape throughout the deterioration of existing net at the end of 2010, of 7.619 billion euros against reserves, instead of going to account for results”.
it Is the decision of the Executive Committee of December 29, 2010 under the chairmanship of the then governor, Miguel Angel Fernández Ordóñez, to authorize Caja Madrid, Bancaja and the rest of participating entities in the SIP not to recognize losses by integrating their distressed real estate business. According to the report of the experts of the Bank of Spain in the judicial process, this decision is caused by a side that was consumed the 50% of the assets of the boxes, but, on the other, allowed to hide the reality and maintain the fiction that they had benefits that year. That allowed, among other consequences, the ipo in July 2011.
“Is the origin of evil. Had three effects: by failing to recognize losses were allowed to hand out bonuses to the executives of the boxes; it was able to pay the coupon of the preferred; and declaring benefits necessary to exit six months after to Bag of Bankia”, ensures the spokesperson of Citizens in the parliamentary commission, Francisco de la Torre, author of the proposal to include this section in the final opinion of the parliamentary commission. The lawyer of the Confederation Intersindical Credit and impeller of the case Bankia, Andrew Herzog, reported this irregularity to the National court, but the investigating judge, Fernando Andreu, refused, after calling for the record of the decision to the supervisor, who could impute crimes to the Bank of Spain.
however, the fact that the Congress of Deputies to bear on this point can have consequences in the development of the trial. The conclusion was approved by carambola parliamentary as it was proposed by Citizens and went ahead with the abstention of PP, PSOE and we Can. The Tower is going to submit a particular vote so that this blow to the Bank of Spain appears also in the report of what happened in the crisis, and not only in the form of a final conclusion.
In their appearances before the parliamentary committee, in November and December 2017, both Ordoñez as the then deputy governor of the Bank of Spain, Javier Aríztegui, had recognized that there was internal division in the supervisor on whether to allow the boxes do not pass their damage to the account results. “There was an employee of the Directorate General of Regulation, which said it believed should be in accordance to results, and the Directorate-General of Supervision remained a theory, which then was accepted by the Directorate-General of Regulation,” explained the former governor. “Finally, the proposal came to the executive committee was the director general of Regulation [the current president of the Spanish Banking Association, José María Roldán], not of Oversight, but the general director of Supervision said: ‘What do we have to apply here? We can treat it in the standard as a consolidable group, and then we only have to apply the sanitation with charge to results, or we have to apply the standard as if it were a fusion, that is to say, an integration that does not have reverse gear ( … ), That was the one that was adopted.”
This decision coincided with the Bank of Spain was preparing with the then vice president, economic, Elena Salgado, a decree published barely a month after to capitalize on the boxes, pushing them to go public. Also occurred after internal reports of the Monitoring area advised not to tell the truth of the deterioration of Bancaja in order not to alarm the markets.
The forensic experts Antonio Busquets and Víctor Sánchez Nogueras argue, however, that “the provisions for insolvencies of the seven boxes founders were consumed in the creation of the SIP, making the adjustment to fair value”. And disqualify that “the justification given by Caja Madrid and the rest of the boxes was that it reflected best the true load losses against reserves and not against results and that there is no specific treatment, which is not true”. “It seems more credible to think that the intent was to generate some profit accounting in 2010 avoiding the boxes come in losses and will continue paying bonus to executives, and even envelopes to the social work, as if nothing had happened”, say the experts in their report.
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