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Moscow Bank Bailed Out Following Hostile Takeover

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http://www.bbc.co.uk/news/business-13999509

Director has fled and is subject of warrant.

And if it can happen there, it can and has happened in the West.

ssia rescues Bank of Moscow in record bail-out

_53818004_bankofmoscowvtbrussia.jpg The bank's erstwhile head, Andrei Borodin, has fled the country Continue reading the main story

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Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history.

The $14bn rescue came after another bank, VTB, gained control through a hostile bid, only to uncover bad loans valued at $9bn - a third of the bank's assets.

Bank of Moscow's former head, Andrei Borodin, has fled the country, and a warrant has been issued for his arrest.

The bank was used by ex-Moscow Mayor Yuri Luzhkov to fund property projects.

'Fraudulent lending' Mr Luzhkov was sacked by Russian President Dmitry Medvedev last year.

In a statement issued in London, Mr Borodin said he was shocked at the size of the bail-out, and claimed that VTB's takeover of the bank was politically motivated.

VTB, for its part, accused Bank of Moscow of committing "fraudulent lending" under Mr Borodin's control, while Russian Finance Minister Alexei Kudrin has called for a criminal investigation.

Under the rescue deal, the Russian central bank will provide a 295bn rouble ($10.6bn) 10-year loan at a negligible interest rate to Bank of Moscow.

Meanwhile, VTB will invest a further 100bn roubles to recapitalise the bank - taking its ownership share from 46% to 75%, enough to qualify for state aid.

VTB, Russia's second-biggest lender, had itself to be rescued by the Russian state to the tune of $6.4bn during the financial crisis.

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http://www.bbc.co.uk/news/business-13999509

Director has fled and is subject of warrant.

And if it can happen there, it can and has happened in the West.

Do keep up BL. :)

This is already referenced on

http://www.housepricecrash.co.uk/forum/index.php?showtopic=166041

But you make the pertinent point. Toxicity is global. Bankin' is kinda finished.

No threads on here whatsoever, surprisingly, about Denmark, for example. Well, another one of their banks crashed last week. All banks from Moscow to Kabul to Copenhagen are stuffed. That's it.

Some countries will pursue the wicked, some won't.

Where will it all end??

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Do keep up BL. :)

This is already referenced on

http://www.housepric...howtopic=166041

But you make the pertinent point. Toxicity is global. Bankin' is kinda finished.

No threads on here whatsoever, surprisingly, about Denmark, for example. Well, another one of their banks crashed last week. All banks from Moscow to Kabul to Copenhagen are stuffed. That's it.

Some countries will pursue the wicked, some won't.

Where will it all end??

well done, I searched for a thread and found nothing...this event would have been hot discussion 3 years ago...now, its par for the course...barely raises comment.

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$9 bill is naff all in the greater scheme of things

Yeah, but it's a lot of money when the bank had minus diddly squat in reserves before it started lending billions more than that.

I think this is a wonderful story about the complicity between banks and politicians.

Mayor Luzhkov is deposed and whoops, a bank goes down.

It's not helped by the fact that, as with all banks and politicians globally, the big idea was for them all to make a fast buck out of property. The English architect, Norman Foster, was commissioned to design no end of glass towers and corporate shrines in Russia. Currently most of these projects are on hold, even less advanced, but no less doomed, than those in Dubai.

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Why has the Director fled? Here he would have been given the Russian equivalent of a knighthood and given a "Fred the Shred" pension.

Oh I think he's fled to London. If we were decent we'd return him, but I suspect he'll be welcomed with open arms. We like bankers here in the UK, even failed ones.

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How are the rest of the Russian banks?

At least the Russians have issued an arrest warrant, slightly different to what happened here and in the US.

Oh Russia has lots of failures . . . (350 between 2001 and 2007 I read somewhere) and there's still some fall out from 2008 of course.

But in most cases the banks aren't bailed, their licenses are revoked.

Denmark doesn't bail banks anymore, and didn't bail the latest bust in June:

Fjordbank Mors is the ninth Danish bank to collapse following the 2008-09 financial crisis and the second to trigger a state-managed closure in which senior bondholders as well as shareholders will bear part of the losses.

The failure of Amagerbanken in February set a precedent in the European Union by making unsecured senior creditors liable for bank losses, highlighting the Danish government’s resolve to shield taxpayers from the costs.

The Danish system contrasts with bank bailouts across Europe, not the least in Ireland where the government has ended up the owner of most of the banks during the financial crisis.

“We will not be involved with state aid,” Minister for Economic and Business Affairs Brian Mikkelsen said on TV2 News.

We think that it is not reasonable to give state crowns to banks that are run badly and have got themselves involved in risky businesses and lost money on that,” Mikkelsen said. “It is not us as Danes that should pay for that.

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http://www.andrey-borodin.com/Welcome.htm

Welcome to the official website of Andrey Borodin.

Andrey Borodin is a Russian financial expert, banker, economist and businessman. He was, since 1995, the President of the Bank of Moscow, one of Russia’s most successful banks.

A globally-respected authority on international banking and finance, Borodin is sought out for his opinions on business and economics both in a Russian and international context. He is a frequent speaker at international conferences and recognised as one of the architects of Russia’s transition from insular communism to major financial powerhouse.

This website will provide information on Andrey Borodin, the story of the Bank of Moscow and related news and other articles. It will be updated regularly, so please check back soon for more information.

Sounds like he'll find a kindered spirit in Kirkcaldy.

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