Spain Sets Massive Precedent — Charges Its Central Bankers in Court

By Claire Bernish

First, Iceland, and now Spain has taken on the Big Bankers responsible for financial calamity, as the country’s highest national court charged the former head of Spain’s central bank, a market regulator, and five other banking officials over a failed bank leading to the loss of millions of euros for smaller investors.

This, of course, markedly departs from the mammoth taxpayer giveaway — commonly referred to as the bailout — approved by the U.S. government ostensibly to “save” the Big Banks and, albeit unstated, allow the enormous institutions to continue bilking customers without the slightest fear of penalty.

Errant bankers and financiers, it would seem, typically manage to either evade actually being charged, or escape hefty fines and time behind bars.

Spain’s Supreme Court last year ruled “serious inaccuracies” in information about the listing led investors to back Bankia in error, thus the bank has since paid out millions of euros in compensation.

But Spanish authorities could not abide the telling findings of a years-long investigation into the failed listing, as Wolf Street explains,

As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV [National Securities Market Commission] (the Spanish equivalent of the SEC in the US).

The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was ‘unviable.’

As AFP reports, “The National Court validated conclusions made by prosecutors who concluded that when ‘an unviable entity has been listed on the stock market, its administrators or auditor should not shoulder all the responsibility.’”

Specifics of the charges have not yet been made apparent, but as The Economist reports:

The court is questioning why they allowed Bankia to sell shares in an initial public offering in 2011, less than a year before Bankia’s portfolio of bad mortgage loans forced the government to seize control of it. It said there was evidence the regulators had ‘full and thorough knowledge’ of Bankia’s plight. After its nationalisation, it went on to report a €19.2bn ($24.7bn) loss for 2012, the largest in Spanish corporate history.

Internal emails and documents played a crucial role in ultimately bringing the central banking officials to task for the failure of Bankia — inspectors bringing issues to the attention of superiors were allegedly ignored. One email cited by The Economist came from an inspector who warned Bankia was “a money-losing machine,” for which an IPO would not solve.

Another report, deemed “devastating by the court,” saw an inspector advise Bankia to seek a private buyer rather than proceed with the listing.

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An inquiry into “the participation of other players, such as officials in the central bank,” was also urged by the National Court.

As The Economist points out, Spanish judges are generally reluctant to sentence first-time financial criminals to prison; though five Novacaixagalicia executives had five-year suspended sentences — levied for embezzlement in 2015 — abruptly enforced in January.

Meanwhile, taxpayers in the United States have yet to see Big Bankers criminally responsible for the financial ruin of so many Americans brought to any semblance of justice for their wrongdoing.

Claire Bernish writes for TheFreeThoughtProject.com, where this article first appeared.

  • colinjames71

    Viva la Revolucion! Meanwhile, us silly gringos get fined for growing vegetables in the front yard. What’s wrog with this picture…

    • This Bull Rocks

      touche!! a sick society we live in…

  • Pete Greco

    Can’t wait for this to happen to the corrupt unconstitutional foreign owned Federal Reserve. $20 trillion dollars of National Debt cannot be paid back if we paid $1 per second – it would take well over 55,000,000 years, in other words, it can never be paid back. Lincoln and JFK tried to shut it down by having the government print its own money. The outcome was predictable and the assassinators were instructed by ??? No one was prosecuted.

    • Tony B.

      JFK never did such a thing although he may have in time. Lincoln’s greenbacks saved the people billions in usury until the bankers got them out of circulation.
      “Paid back” is the wrong term as the bankers never gave anything to pay back. They just created figures in a ledger and called them “loans.” With such a scam you imprison or hang the criminal bankers and REPUDIATE the fake debt.

      • Tony B.

        Oh, forgot, you also confiscate ALL the banker’s wealth as it is stolen from those who created it by their own labor.

      • betterboy

        All the income tax collected goes to pay the interest on the money that is printed by the Fed and given to our government – even though it is our government that should be printing the money and paying no interest. Talk about the greatest Ponzi scheme ever!

        • keith

          Man I love these post, keith

          • betterboy

            Thanks, it is all about exposing the corruption and crooks. Check out pizzagate on youtube – the pedophile politicians are trying to quiet it, but abuse of children will not be quiet.

      • keith

        Got some outstanding post here, thanks all, keith

    • Karolyn

      JFK also wanted to abolish the rogue CIA and got assassinated for his plan. The Federal Reserve needs to be audited and abolished now.

      • betterboy

        I read that JFK used an executive order to print money and that is why he was killed.

        • keith

          Either way the results were the same, keith

    • keith

      So true, so true keith

    • The national debts, like all bank loans and foreclosures, are fraudulent. Banks lend no money. Money is created from thin air with book keeping entries when it is borrowed. Banks risk no “VALUABLE CONSIDERATION” as required by law for a binding legal contract. This is your only defense when in bankruptcy court.

  • littljo

    Glad to see other countries are pushing back against the unholy zentral banks.
    ‘The Creature of Jekyll Island’ by G. Edward Griffin is an easy read (better than the rambling Tragedy and Hope by Quigly). When asked to sum up his book for the 2008 Ron Paul freedom rally, Griffin said…”can you say the biggest scam in the history of the United States…”
    USURY is unChristian.
    Direct Taxation is theft.
    END the FED and all zentral kontrolled banks.

    • collette.robert@yahoo.com

      I’m impressed that you read Tragedy and Hope. It must be read slowly section by section but it was once banned to the public and was the official history book of the elite. You are correct that economic policy is what controls us and that power is in the hands of foreign nationals at the moment.

  • Ace

    Lol. Countries create central banks and then hold them accountable? What a joke. If they really wanted to hold them accountable, they would get rid of banking and legal tender laws.

    • betterboy

      Countries don’t create central banks. Private corps and Rothchild types create central banks and pay corrupt politicians to pass laws to give the governments power of creating money to the private central banks. That is how the USA gave our money printing in 1913 to the Federal Reserve private corp. It was a coup that was silent and slithered upon us like a slow moving snake. Corruption is always at the heart of all terrible deals.

      • keith

        Got to agree, even better than Ace stated, keith

      • Ace

        So countries don’t create central banks but corrupt politicians that make the laws do? Gotcha.

    • keith

      Very well stated and very trrue, keith

  • bcbingram

    Good start Spain, thanks

  • nimbii

    We should do the same.

  • betterboy

    Consider this banking issue!

    Syrian refugees were being interviewed in Ohio. They said they were signed up by social security. No wonder SS is bankrupt. SS was sold to us as a retirement plan. We pay in our working lives and have money to retire with. The gov has stolen our insurance money and given it to those that did not contribute. Then they tell us there is no money left for the workers that paid in all their lives and they keep moving the retirement date to an older age. This is a fkn outrage! I want Trump to investigate this and I want the government to put back the money it stole for purposes other than retirement payments. I want to be reimbursed for being ripped off. My SS payment is lower than it should be because the government has been using my retirement money as welfare to refugees.

    • Andrew Pate

      The Wars your country has been in since 911 has cost Trillions of dollars which leaves plenty for social security. Its always the same story “Where the money going to come from”. But you never hear that when it for the military, funny that eh?

      • betterboy

        Iraq war was wrong. Bush lied that Saddam had nuclear weapons. Bush is a war criminal. Bad people who get into power do bad things in every country.

  • Congratulations, Spain. Talk some sense into our corrupt politicians to get them to do the same in America.

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