From ZeroHedge:
The Bonds Of The Third Largest Austrian Bank Are Crashing
Last year Austria's largest bank, Erste Bank, sent shudders of Credit Anstalt through the European Banking System. This year it is Austria's 3rd largest bank that is scaring investors senseless. On the heels of the Swiss National Bank's decision to un-peg from the Euro, Raiffeisen Bank's Swiss-Franc-Denominated mortgage worries have resurfaced (along with Russian/Ukraine writedowns) and nowhere is that more evident than the total collapse of the bank's bonds (from over 95c to 65c today). Even after the ECB Q€ (and some apparent intervention to weaken the Swissy) bonds kept free-falling. Perhaps, The Freedom Party's demands for a bailout will grow louder as the contagion concerns across Europe's banking system explode...
RAFI bonds are collapsing...
As Bloomberg reports, Raiffeisen had a total of 4.3 billion euros of Swiss franc loans outstanding as of September 2014, according to estimates by Moody’s Investors Service....MORE
The largest part of these are in Poland, where the franc has appreciated 17 percent against the zloty since Jan. 14, threatening to push up defaults on the bank’s 2.9 billion euros of mortgages in the Swiss currency.
“There’s a lot of people worried about the bank’s Swiss-franc mortgages in eastern Europe,” said Gregory Turnbull Schwartz, who helps oversee the equivalent of about $82 billion at Kames Capital in Edinburgh and doesn’t hold Raiffeisen bonds....
The collapse of Credit Anstaldt brought on the second, nastier, phase of the Great Depression. From a pre-bull market post:
Feb. 16, 2009:
Creditanstalt Redux?: Failure to save East Europe will lead to worldwide meltdown
I've been feeling far too chipper so I decided to check in with Ambrose Evans-Pritchard. Yikes.After the rescue of the bankrupt corpus and a couple mergers CA became part of Italy's Unicredit in 2006....
From the Telegraph:The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.Well, other than that Generalfeldmarschall Paulus, how's the weather?
If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung....
Creditanstalt failed in May 1931. From Kindleberger's "World in Depression: 1929-1939":
In 1929, the Bodenkreditanstalt was fused overnight with the Creditanstalt. The Bodenkreditanstalt brought to the Creditanstalt large loans to industrial concerns which could be maintained only by the device of ignoring market values...Hmmm, sounds familiar.
Unicredit now owns Creditanstalt.
