How a $450 Million Loss Was Hidden From Sight
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- เผยแพร่เมื่อ 16 ต.ค. 2024
- 11 years after one of Europe’s biggest banking scandals, 13 executives have been sentenced and financial penalties of $175 million have been dealt. Bloomberg investigates how Deutsche Bank and Monte Dei Paschi cooked their books to make a half billion dollar loss disappear.
Reporting by Elisa Martinuzzi
For more about the Monte Paschi scandal:
www.bloomberg....
#BWStorylines #TrueCrime
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For more about the Monte Paschi scandal: www.bloomberg.com/opinion/articles/2019-11-11/why-deutsche-bank-s-monte-paschi-scandal-still-matters
sadly all the hedge fund and banker that caused the various financial crisis always get tax payer bailed out and company bonuses after making tax payer clean up their mess.
This is boring
This was fascinating. Thank you.
I think the whole system is run by convoluted and complex accounting, 2008 bailouts were just the system trying to stay alive. Imagine if every year the units of measure changed mm, cm, m, km, it would be chaos, but economics can get away with its basic unit of measure, aka money, rapidly appreciating and depreciating, central banks are not independant, how can they be when they are run by people. Eventually this house of mirrors is gonna break and thank goodness we have nukes this time around, so hopefully we dont go full retard and have WW3.
should we be hearing about the punk jargon that rides this code base
Imagine how many of these deals happened without journalists finding out. Probably daily.
John Doe unsustainable business model
@John Doe Yes, so much is being hid and manipulated it's pretty dang obvious. But such manipulations are known and planned. They are supported by the institutions deliberate blind eye with a "well it's the governments job to oversee" excuse.
Obviously high up officials in the Italian government were involved...
Specifically, foreign journalists with nothing at stake. Italian journalists wouldn’t break it, like US journalists wouldn’t break the US mortgage bond scandal.
Journalists are the worst. For every one incident they report, there would be 100 unreported and paid off.
Wealthy, powerful people know that complexity is the best way to hide failure and greed.
Well said.
What makes me laugh is people are astonished by such things. If you think this scandal is big, just imagine what's happening behind the scenes with the Federal Reserve and Wallstreet in the USA. The majority of our national and individual debt is the result of the greed of those two institutions.
At this point the FED is a prime suspect
Thats why taxes are so complicated.
Daveycrocker44 not really companies like TurboTax Lobby the congress not to overhaul tax law complexity
Made $450 million lost disappear, but only got a $175 million fine, I believe that is a good deal.
Timing is crucial. Loss is loss, but at the time $450 milion would mean no support from the government and thus decline of institutions.
This is why white collar crime continue to flourish.
175million$ fined is applied after they confiscated the 450million$
Thats an even better deal when you think of the fact that 450 million dollars in 2008 is worth 530 million now
That's a far better deal than trumpy ever made!
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The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
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Although my knowledge of the business is limited, it seems that this is the ideal time to enter the market based on my understanding of supply and demand in the economy. The consistent price variations, which shouldn't be an issue, are the only thing stopping me. But I really need a counselor; could you please assist me?
One of the fiduciaries I deal with is Alicia Ann Jordan. Just check the name. There would be a letter with the necessary information to set up an appointment.
One thing I'm learning in this era, if you want to commit a high paying crime with minimal punishment... do it in banking.
Or Politics !
White collar business crime, make billions and pay millions in fines.
Bloomberg we would like to hear more of such financial wrongdoings. The brexit one was good to. Make more of these!
Exactly
.
@Martin Shepherd I asked myself thesame question
You owe the bank a couple thousand you've got a problem. You owe the bank a couple million the banks got a problem.
Murica: hold my 30billion debt. :v
"We'd never seen a deal like this, in which a client received a large amount of cash in the beginning and then paid it back and then some afterward"... Sounds like a loan, doesn't it?
@@lanorothwolf2184 how does it work then?
They wouldn't have ended up in court for a loan!
@@kr1886 I do understand this was illicit business. Just the way he put it sounded a bit puzzling
@@s1ga they were stealing the money and reporting it as loss the the receive a magical loan to put back the cash after people found out
@@s1ga I mean it was kinda like a ponzi scheme, you lose the money that wasnt yours, but you replace it with new money so it isnt noticed until someone sees that the new money is missing and so on... but they got caught because it wasnt just a couple of millions but like 1.5 Billion which is a lot more, substantially a lot more
Banks: Crypto is scam
Also banks:
HSBC: Crypto currency is a form of money laundering.
Also HSBC: Thank you for joining our bank Mexican Drug Cartel. Please let us launder your $881 million for you 🙂.
The banks and bankers never go to jail. They’re never held accountable. It’s always the common man who is made to suffer. It’s appalling.
Bank losses 450 million. Also bank: "Tis but a scratch !!!"
Lanoroth check out the FEDs QE schedule over the next few months 😂
When you wanted to be a chef but your parents made you learn economics
You cook the books. Nice one
Italians are some excellent cooks. Don't let me balance your check book!😅
Poor explanation of the actual mechanics behind the deal. Moral blabla - 10 seconds explanation - moral blabla
Right? Like explain me the deal then I decide if I'm morally opposed to it or not.
Why would you expect the government to do anything meaningful about bank corruption when governments depend on commercial banks to buy their bogus bonds?
Makes you wonder how many such cases are hidden in plain sight and will never be unraveled to the common man...
_We'd never seen a deal like this in which the client received a large amount of cash at the beginning and paid it back, and then some, afterward._
That's just called a loan - banks do it all the time. What's illegal and immoral is the accounting around it.
yeah, this is not described properly in the segment...
No. They’re right. They’re saying the bank wired a client who they never had a relationship with before nearly 1/2 a billion. Banks don’t underwrite loans like that because it’s too risky. They underwrite bonds instead of spread out the risk (and they did that too illegally). It is EXTREMELY irregular for a bank to do that.
Is it just me, or did they not just literally report absolutely nothing, i literally didnt hear any significant wrong doing
A couple planes crash into buildings and a trillion dollars of missing money at the Pentagon is instantly forgotten.
Regulators understand exactly what they’re doing. It’s just not in their interest to do something about it.
greedy corporations 😢😢
This is banking corruption.
Trust businesses they say... trust the invisible hand they say...
Great reporting, thanks
Too big to fail , too big to jail , the brinkmanship between regulators and financiers where the former always blinks first .
They're illegal transactions for a reason, there's always a victim , in this case it's the population of Italy and beyond .
Apparently it was structured as a sale and leaseback or like REPO transaction but the deal would not do the accounting required coz you have to report the loss.
Many of the subtitles have erroneous HTML font tags in them.
I see no difference from them an a regular bank robber or scammer ,which gets jail time ,but they dont ,
I send 10 of my Paintings to Monte Dei Paschi & Problem Solved ...Just say the Word
Lol
@@Ambyfigureitout lol
"They couldn't admit the loss they had to face."
Couldn't? Or wouldn't?
How is this any different to a loan? Receive a large amount of cash up front, pay back over many years with interest?
Bankers going to jail? Hold on let me drink something so I can spit it out
very high quality reporting and production
the system will always always be corrupt
If there’s a lesson for you out there is that greed is everywhere and that you are naive to think that people are saints or can be regulated.
This story doesn't make the evening news but its as important as anything else out there.
How can you make an entire news pieces on criminal misconduct and not even come to mention the victims or what the negative consequences of their actions are?
11 years old news... thanks guys
"The higher management doesn't understand much at all" this guy speaks the true true.
That’s the gambling reporting rules. If you take a list from gambling, you can deduct the loses from your gambling winnings.
How much was the total bailout in the US, FED and tax payers combined? 14 Trillions? And who went to jail in the US? This is peanuts.
The Swamp is Deep, even in Europe!
Let's make Europe Great Again!
Trump is swamp too.. So not sure where to start first
@@zyubat Trump has done almost everything he promised in the campaign,and what he has not done has been due to the Democrats!He donates his salary..He is the Voice of the Heartland!
Landslide victory 2020...
@@ClarksonsinUSA Not true.
$450 million might have been invested in brexit and syrian war.
Bloomberg at its best!
Very interesting by Funny though that Bloomberg don’t talk about the different American investment bank and hedge fund that did exactly the same during 2008
Heck they still do it right now ....
People do time company’s pay fines
A Bank losing 450,000,000 ? Not possible. Please think or rephrase - they cannot find the PRINT button
As hard as they try, investors actually noticed that?
The stocks been going down down down...
It's called manipulation. Hype the stock and than short the stock.
All in a days work!!...breaktime!!!
I thought they were going to talk about Salvador Mundi that MBS bought at a similar price
Oh wow $175 million what a crack down ....
Hey Bloomberg, if you want to discover all shady deals of DB, you have to make a "discovery" like this every week.
“Go to... face jail time” yeah obviously 😅😅
Thank you for REAL news - so we can learn !
...this is Bloomberg tv lmao. Do a little homework before you give it too much praise
Branden H he is an insider
I like how this man criticizes Italian government for not being to hard when in America none of the bankers that cause the US realty collapse were prosecuted but we will look past that huh America is the victim
How does this help a 9-5 person doing the right thing...😩😫
Rich peoples problems...😕
wow, greedy banking crooks got away with financial crimes. Look like Italy is heading for next wild ride -- The Europe's Great Depression. We will be seeing bail outs and riots in Italy just like Hong Kong riots. This should never happened. The crooks should be thrown in jail.
Glorious entropy!
How come the penalties are always leas then what they steal?! There’s no jail time so truly what’s the penalty, you only get half of what you stole?
Best legal system money can buy!
They didn’t steal money, this money would have been reversed. The bank was already in trouble, perhaps a larger fine would have caused it to collapse. In this instance it’s more about punishing the people who structured the deal.
This 10min video would have been 18mins if I was unable to skip all the ads
Chump change to what investors are ripped off every day.
A lot of shady money movements also happened in Portugal during the 2008 crisis, namely with BPN, BPP, BES...
Morale hazard. That is the root of the problem, nationalising banks is one thing but assessing their morale hazard should be like a restaurant and hygiene. Losses need to be underwritten.
If they didn’t make the loss disappear they would have had a bunch of insufferable meetings with upper management where they complained about losses
many people in the comment section did not understand what happenned. The Italian Bank did not steal the 450mil , it was a bussiness loss i.e their expenses were higher than their revenue. The Bank did not want to publish it for few reasons.
1- Investors: Stake holders and financial investors will probably dissolve the current management , impose investment restrictions and demand employee cuts etc to reduce expenses.
2. Customers: Bank clients will back off from further savings, loans and deals since the Bank might face bankrupcy in few years/months and this situation/unthrust will further negatively financially affect the Bank in the next years.
3. Government: Due to the financial crises and Bank poor performance the Gov't should have forcefully provide cash loan to this Italian Bank so as to prevent backrupcy and secure current Bank deals and employments. Doing so will give the Gov't rights to intervain in the Bank's current decision making process which is not a pleasure for the Bank: The Gov't works for the benefit of their citizens, but Banks prioritze their own gains and that of investors.
So the Plan was to mask the Italian Bank's loss, untill the Bank become profitable hopefully very soon to avoid the upper 3 scenarios. The 175mil fine is not to make for the 450mil loss, but it is a penalty for not playing fair in providing accurate financial infos on which many Institutions, clients and investors base themselves to make critical decision amist a financial crises and to dessuade futher companies from tinkering with their finances
These people will never learn until they are on the pyre.
Amazing, gonna have to keep this vid. How they both kept a straight face , would love to see the out takes. Projection is what this was all about , making out that checks & balances are going on , so that Faith and Credibility in banking is all above board. I could go on but what's the point , if people haven't got it by now, they probably never will.
I got it a long time ago and removed my funds from probably one of the largest bank systems in the USA; set it up in a small town with a large bank that has more assets than debt and intelligence as well.
I watched the whole video and I still don’t understand what the crime was
They were trying the hide the fact there was huge losses.
@@jewellui By taking loan from another bank and not stating that in their books & to the public - investors
It is NOT up the politicians. It is up to the markets. They should be self-regulating but capitalism has failed. The money flows are now so great that the idea of "self-interest" has be replaced by greed.
Problem starts when you have bank regulators as banking people.
A 2 minute video stretched out to 10. Content starts at 5:52
I still didn't get exactly how did they do it.. Can someone explain?
There were a number of things said in this vid that articulated the severity of the matter: 1. They should be arrested; 2. Concealed it in a multi-layered transaction that was like magic; 3. They concealed the disclosure of the loss from the public and shareholders; 4. They broke from generally accepted accounting standards and principles in Italy to do it. But there could be more to this story that would be coming from the other side.
It was mentioned in 9:15 that even a CFO wouldnt understand this and you need a PHD in charge. Well instead of putting the burden on a CFO to be PHD to know this, how about we simplify transactions. Accounting and financial reporting are so simple. You have got ssles, margin, income, working capital, equity, loan. The fact that we have transactions or products so complex that its hard to know what kind of an animal they are just shows how much of a fraud these things are. Everything in business world is common sense, you dont need high IQ for things to make sense and to do business. Complexity is what make something less understandable. If you dont understand it and you fell on dealing with it then you fell into the trap.
they covered up the 2 trillion lose in pantagon by flying an airplane into the building
Fiat currency is so 20th century. 🙄
Uhhhh. Fiat currency is a big reason why the Great Recession wasn't deeper than it was. It gave central banks far greater leeway to do what was necessary.
Country Debt payback to the crown! They likely to sabotage internet based coins risky bit coins dropped from massive high
If a person needs a PhD to understand these transactions then i am thinking about the qualifications of people who made those transaction.
Shanay it’s like throwing an Apple, the dumbest idiot can do it, but only the most educated people in really specific fields can fully explain all the processes behind it
@@willinton06 So setting up a complex accounting scheme unlike something ever done is as easy as throwing an apple and has not to be understood before inplementing. Ok.
Robin Östringer you need to be smarter than the Apple throwing idiot to set it up for sure, but way dumber than the guy who can explain all the processes that go behind it, at my firm this guy was an accountant for like 30 years, and we were going to be acquired so he had to explain lots of things to the new investors, and he ended up quitting when he realized how convoluted all of it was, how much he had riddled the process over the decades, he case back when the execs told him they would get a consultant to help him so it is a happy ending
I need a PhD to understand the transactions? How about a diploma to know how this actually happened?
This is the European version of Scam 92
This is Wolf of Wall Street PART 3
What was part 2?
Can one say, the German bank gave a loan to the Italian bank? If it is formulated as such, would it still be illegal?
Do one about the Pentagon misplacing 10 trillion USD
welp, hold onto your seatbelts for the 2020 recession
Asset prices are drastically overvalued, low interest rates, and QE caused one crisis, we need another to reset asset prices. Bring it on, the sooner the better.
Complex steal more like, financial shenanigans have become the way of the world.
"Yes it's true, the higher management often doesn't understand much at all actually."
Hmm might that be intentional, ie, the cloak of supposed plausible deniability.
Money is a scam .
The HTML in the subtitles is interesting.
$450 million fraud crime equals to no jail time in Italy, not even for fall guys, this is the standard now to keep in mind for the next financial crisis when everyones looking around asking "hOwDidThiShAPpeN?"
Listen to what he said carefully
” there is a recession coming” !!!!!
Start saving people start saving
taz santiago honestly that is the one part that got me!! We need to save for real.
Yeah you really need!
9:35 Isn't that intentional? Plausible deniability.
But what was the deal though?
It was just a loan to the italian bank but they committed fraud because they said that it was profit when it was just a loan
This should be a movie.
Lesson in white collar crime = If you are going to do it, do it Big!
Correction " AS BIG AS YOU CAN"
hmm, I don't get it unfortunately
Man makes 45 bucks disappear at a small retail outlet. Might get arrested, shot, or worse.
Man makes 450 million disappear....
there will be too many people to question to make a good show thus nothing much will happen
i think they read about why 'A' STUDENTS WORK FOR C STUDENTS' BY ROBERT KIYOSAKI
Yes. 'C' students make 'A' students disappear.
their 'C' students are FIRST CLASS graduate from Harvard/Cambridge/Princeton while you reading nonsense from Robert K who knows very little about finance but selling his seminar and books.
WHO WAS THE CLIENT!!!!! ANSWER THE QUESTION!!!
Lol
First thing is, NOT trust a bank that does business with you. Secondly, inquire about others that you do business with and either avoid them or cut ties with them! That about covers it.
Banking secret
As of right now America’s banks are facing short of money. The Government been helping them and giving them money with a loan. There’s going to be a crash later in the future.