If depositors, lenders and counterparties were to refuse to roll over funds to VW, the company could hang on for a bit. It has €33 billion of cash and marketable securities on hand, as well as unused bank lines and the cashflow from the car business. The German government would lean on German banks to prop up their tarnished national champion, 20% of which is owned by the state of Lower Saxony. So far the cost of insuring VW’s debt has risen, but not to distressed levels. Still, unless the company convinces the world that it can contain the cost of its dishonesty, it could yet face a debt and liquidity crisis.
Category: Regulation
Capitalism Must Throw The Book At Its Culprits
For capitalism to retain public faith we need a system where the rich can get poorer as well as the poor richer. There need to be snakes as well as ladders in the boardroom board game.
Individual accountability for sins is the big omission in too much of contemporary capitalism. To use an analogy that the bosses of VW might understand: we need the corporate equivalent of a sharp spike in the middle of a car’s steering wheel. If the consequences of dangerous driving were greater we might have safer roads. The same is true of corporate stewardship. If there are no downsides in excessive risk-taking, only upsides, then shareholders should not be surprised if CEOs lead their companies to catastrophe.
Secret Art Storage Facilities Under Scrutiny
Don’t hate the player, hate the game.
Oligarchs cannot be blamed for being extra-opportunistic anyway.
That said, art has been commoditised for too long without being properly regulated.
Nearly a third of art collectors and professionals surveyed last year by Deloitte Touche Tohmatsu Ltd. said they had used a freeport. Experts speculate that the freeport in Geneva, which traces its roots back to 1854 and is controlled by local authorities, may house the most valuable art collection in the world—although its holdings are generally secret.
Someone interested in laundering money could arrange to use ill-gotten funds to purchase a painting inside of a freeport, Mr. Palmer said, and then resell the painting inside of the facility a few months later. Experts say it can be difficult for a customs official relying on a printed summary of a sale conducted inside a freeport to know for sure if the amount exchanged was appropriate, or if a painting that was purportedly sold was real.
Société Générale Contre Jérôme Kerviel : Fin du “Game” ?
Jean-Philippe Denis :
Et voilà comment la troisième ironie peut finalement être empruntée à… Jean de la Fontaine. Lorsque les animaux sont malades de la peste, on le sait, on devrait souhaiter « selon toute justice, que le plus coupable périsse ». La Fontaine toutefois a prévenu : tel est rarement le cas puisque « selon que vous serez puissant ou misérable, la justice vous rendra blanc ou noir ». Mais, vingt ans après le scandale du Crédit Lyonnais, à avoir ainsi permis dans le cas EADS que ne soient tirées les leçons des singularités et dérives managériales qui se jouent dans les « zones grises » du capitalisme français et de ses « grands corps… malades », le Conseil constitutionnel pourrait bien finir, « à l’insu de son plein gré », par donner tort à Jean La Fontaine.
Was Tom Hayes Running The Biggest Financial Conspiracy in History ?
It was an audio CD from inside Barclays. Gensler, his coterie, and members of the enforcement division gathered on scuffed-up sofas and chairs in the waiting area outside his office—the only meeting place with a working CD player—to listen. It was a telephone conversation between two Barclays middle managers that had taken place 18 months earlier, during some of the most turbulent days of the crisis. Speaking in a cut-glass English accent, one of the men told a subordinate that he needed to start lowering the bank’s Libors. When the more junior employee started to object, the first man told him the order had come from the most senior levels of the bank, who in turn were acting on instructions from the Bank of England.
“Well, that’s sort of ironic that you’re firing me, given that you were involved in it up to your eyeballs,” Hayes later recalled telling McCappin.
Abnormal Capitalist 