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Anglo disease from the inside

by Jerome a Paris Fri Nov 14th, 2008 at 06:57:24 PM EST

Dexia se déleste de son rehausseur de crédits pour survivre

La vente de cette filiale de "rehaussement de crédit", activité méconnue qui a été l'un des accélérateurs de la crise financière, va mettre la banque à l'abri d'un risque potentiel de plus de 500 milliards de dollars, mais elle va se solder par une moins-value d'environ 1,5 milliard d'euros.

Dexia dumps its bond enhancement monoline to survive

The sale of the "credit enhancement" subsidiary, involved in a poorly known activity that was at the heart of the financial crisis, will protect the bank from exposures of up to $500 billion, but will translate in a loss of about €1.5 billion.

"Dexia était à la fois un hedge fund (fonds spéculatif) et une banque classique", a commenté une source proche de la banque. "Elle va redevenir une banque", a-t-elle ajouté."Dexia was at the same time a bank and a hedge fund", says a source close to the bank. "It's going to become a bank again."
"Dexia a perdu de l'argent quand elle est sortie de ses coeurs de métiers en s'exposant de manière trop forte à un risque américain qu'elle ne savait pas gérer et à des activités financières qui ont pris un poids disproportionné dans les activités du groupe", a commenté M. Mariani."Dexia lost money by moving away from its core business and taking too much risk on US assets which it could not manage and on financial activities which took a disproportionate weight in the group's activities."
"Nous ne devons jamais oublier que les banquiers font des erreurs quand ils ne s'occupent pas de leurs clients et quand ils prétendent pouvoir conduire des activités déconnectées de leurs activités de clientèle", a déclaré M. Mariani."We should never forget that bankers make mistakes when they don't take care of their clients and when they think they can run deals unconnected to their clients' business."


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http://www.eurotrib.com/story/2008/10/17/62354/121

(to be updated...)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Nov 14th, 2008 at 06:58:53 PM EST
Hope this means you will be getting back to what you do best sooner.  At least it wasn't "Long Term" Capital Management!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Nov 15th, 2008 at 01:43:25 AM EST
"core business", "working for your customers"...
So it's back to "boring banking", heh?
by Bernard on Sat Nov 15th, 2008 at 03:46:17 AM EST
What happened to all the hedge fund managers within Dexia who presumably treated their boring banking colleagues with contempt?  Were they made redundant, shuffled sideways, or promoted as has often been the case in Anglo companies?

notes from no w here
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Nov 15th, 2008 at 05:23:26 AM EST
Their French and Belgian bosses are being fired, as far as I can tell (top management is being significantly renewed) but I don't know what will happne below.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sat Nov 15th, 2008 at 05:42:09 AM EST
[ Parent ]
Should be quite a few second hand Porsches going cheap... What happened to the boring Prius/diesel driving bankers who pointed out the risks of going into opaque derivatives before it was fashionable to do so?  Were they sidelined into even more boring industrial/commercial lending for stuff like utilities that will never go anywhere? I.e. really predictable stuff like wind farms?

notes from no w here
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Nov 15th, 2008 at 05:50:45 AM EST
[ Parent ]
really is one of main vectors of Anglo Disease...

You can't be me, I'm taken
by Sven Triloqvist on Sat Nov 15th, 2008 at 07:26:26 AM EST
[ Parent ]
This mess is beginning to have serious consequences in the real world :

http://londonbanker.blogspot.com/2008/11/systemic-risk-contagion-and-trade.html

by fredouil (fredouil@gmailgmailgmail.com) on Sat Nov 15th, 2008 at 08:40:34 AM EST
See Migeru here and here.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Nov 16th, 2008 at 02:14:20 PM EST
[ Parent ]
Thanks

These diaries are downright scary.We are hitting the wall at full speed.

by fredouil (fredouil@gmailgmailgmail.com) on Sun Nov 16th, 2008 at 04:12:00 PM EST
[ Parent ]
In a somewhat related subject, how do people here see decoupling? As I recall most people seemed to be in agreement with the idea of decoupling. Anyone care to comment if they think that that still is the case?

Thanks

by t-------------- on Mon Nov 17th, 2008 at 09:43:43 AM EST


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