A banking problem ? 


A bank in peril is not necessarily doomed ; simple ways out do exist without necessarily calling for public money. The undersigned has successfully carried out banks and finance companies restructuring missions in Nigeria, Ivory Coast, Algeria, Thaïland and Yemen.

Banking crises and restructuring strategies



A bank facing serious financial difficulties stemming mainly from non performing loans or eccentric derivatives should not be calling for government rescue.
With common sense and integrity, such difficulties could be overcome.
A primary role should be played by "bank restructuring" workouts which could avoid that tax payers carry the final financial burden of bank's own mistakes.

European Banking Union : 18th December 2013 agreement and european parliament vote dated 15th april 2014


nformation conveyed by the media on the fundamentals of the 18th December 2013 agreement and April 15th 2014 European Parliament vote on the European Banking Union raise the following questions.



Will EBA act strictly as a regulatory unit whose rules shall be obeyed by SSM ?
Mrs D. Nouy's statement dated 19-12-2013 goes into that direction :
"EBA is necessary to guarantee the balance of European banking rule. SSM will bring into the picture discipline and political will".





They were carried out in 2010 and 2011 under EBA's responsibility and proved to be useless :


  1. 2010 : when EBA stressed "that everything  was going for the best ", the Irish banking system collapsed,
  2. 2011 : the stress test carried out was unable to foresee the Greek banking system collapse.


The reason for these inadequacies is quite simple :  a stress test is carried out on a "macro" basis which only deals with the bank's gross figures, when an in depth analysis should be performed on a "micro" basis, i.e. , customer by customer and all other assets including "derivatives" in order to have a clearer picture of the bank's strengths and weaknesses.


Why then to have a new stress test being carried out in 2014 ?




Implementation of the SSM on 19th March 2013 ; this centralized unit will be in charge of controlling the 130 most important banks of the Euro zone ; explanations in that direction from Mr. Michel Barnier former European Commissary for finance services.
When one reckons that the average work load, on a yearly basis, for a controller is from three to four banks, it is difficult to understand the advanced figure of 800 to 1 000 controllers ?

Will the real purpose of SSM be to : 

  1. compel banks to take necessary provisions on Non Performing Loans ?
  2. Compared to the total credit in the economy, set reasonable limits to derivatives ?
  3. Compel provisions on "derivatives to be sold" which are tantamount to incurring losses ?

Will SSM be a passive or an active control unit ?


4-OLIVER WYMAN COnsulting firm coming in to the picture 

In order to carry through the audits of 130 European banks, BCE has enrolled the assistance of an American consulting firm : Oliver Wyman.
It is most surprising that, at the very moment when BCE is made responsible to carry banks'balance sheets analysis, the said duty is delegated to a third party ? 



MES (European Stability Mechanism)
This unit was launched on 27-09-2012. Its role was to assist European banks in jeopardy :

  • authorized capital : € 700 billion,
  • financing power :    € 500 billion.

Article 16 paragraph 2 of the bylaws indicates : "The condition attached to loans granted by MES is to be found in a macroeconomic adjustment program specified in the draft agreement ..."
Requests for Countries' guarantees in favour of banks beneficiaries of MES loans is not to be found in the MES bylaws. 


Implementation of a single unit : Simple Resolution Mechanism (MRU) working with two units :
i)Simple Resolution Council (CRU) in charge of the banks' winding out processes.
It has been announced that these could be finalized within a two days frame work !
ii) Simple Resolution Mechanism ( SRM)
Will be in charge of the financial aspect of a bank restructuring work out ; it will be funded by the banking sector.  

  1. Preamble

    During the time frame 2008-2013 European governments have recapitalized banks up to an estimated figure of € 2 500 billion.

  2. Time table

    Beginning :   2015 ?

    Completion : 2024 ?

  3. Available financing

    A figures amounting to € 55 billion has been mentioned ; when compared to the already disbursed amounts, this figures appears inadequate. 


Contrary to what has been emphasised, it will not be cut off : sovereign debts and those stemming from banks' bankruptcies will follow on being aggregated.
Indeed, for the time being when MES lends directly to banks in difficulties, it calls for Countries' guarantees ; what will be on this account the SRM policy ? 


Within the SRM overall financing resources, each country will be assigned its own share ;  on which  basis will it be ? 


The people responsible for bailing out a bank are listed in the following order :
a) shareholders,
b) creditors, and
c) when considered necessary by governments' authorities, depositors may be called to help out a banks' rescue ; starting with deposit balances in excess of € 100 000. (Mr. Michel Barnier, European Commissary, statement dated 19th December 2013).
Deposits will be protected by Governments up to € 100 000 ; beyond there is no guarantee .
Protected deposits will be reimbursed within 7 days.
This is as good as despoliation and thus may entice holders of sizable deposits to look for more hospitable jurisdictions.
Coordination of European deposits'guarantees laws : in the light of the above, it looks like a deception.  


The financial rescue of a "bank in difficulty", appears currently to be, the number one consideration with little thought being paid to the actual causes of the disaster nor their remedies.
Should a thorough analysis of the jeopardized bank is not carried out department by department, and no appropriate actions are implemented to correct the evidenced wrong doings, subsequent invested cash will be to no avail :

"the same causes will produce the same results". 


In some instances public financial risks and citizen's losses have been generated by some irresponsible banks executives.
It is necessary to remind to some banks managements that banks are responsible for carrying out essential public services hence those executives do carry personal responsibilities towards the society into which they operate.
When it is clear that either ineptitude or lack of responsibility or deceit from some banks directors have been the grass root for banks' failures, then, these executives' responsibilities should be called upon to justice by their governments. 

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  • Raymond Biré
  • French citizen


  • Master business administration (Ecole Supérieure de Commerce de Paris, ESCP-EAP)
  • Bachelor private law, honour, (Paris Law University)
  • Master business law, (Paris Law University)
  • Harvard Business School, Advanced Management Programme
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