Research. The case was settled in a week, from 6 to 11 November. The bank was the second largest to the largest financial centre on the planet, its bankruptcy would have caused a panic and plunged the global economy into a terrible crisis. Alerted, the minister of finance has called to the aid the central bank, and the rescue was quickly developed.
While the “healthy” part of the assets was left to the management of the owners of the bank, the “toxic assets” were grouped into a “bad bank” to which the central bank lends $ 7.5 million, recovering in part by an exchange of loans with its counterparts in French and Russian, at the height of, respectively, 3 million and 1 million.
The investment banks are called to the rescue : they guarantee the coverage of future losses up to the amount of 17 million. It will take four years to liquidate the distressed assets, the bulk of which will be sold, willy-nilly, to the partners of the bank-offending, forced to transfer their properties to recoup losses.
2008 New York ? No, London 1890
2008 New York ? No, London 1890. The bank called Barings, and the sums are in pounds sterling. Barings, number two merchant banks of the City after Rothschild, ready to industrialists, business men, to States, to other bankers. Too big to fail. But since the 1880s, Barings also suitable for investors attracted to the eldorado that was at the time… Argentina. Ports and railways for the export of wheat and meat, to real estate development in the cities where the arriving european immigrants, the sovereign debt of dictators successive…
But a bad harvest, a coup d’etat, the insolvency of migrants miserable… the whole thing collapses in the fall of 1890 : the potential losses amounted to 100 million. As there was not yet a telegraph cable…
