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 and finalized banks and finance companies restructuring missions in Nigeria, Ivory Coast, Algeria, Thaïland and Yemen.

Raymond BIRÉ

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    • 1 - Assessment

      Even in the event of a disastrous financial situation, a bank should not ask, through government authorities, public money for financial support.
      The more so when this state of affairs most than often stems from mistakes made by the banks’ Officers themselves.
      The 2008 banking failure came from an accumulation of toxic assets as well as financial instruments of extravagant complexity; these two categories of commitments not being sufficiently provisioned
      With the implementation of "restructuring banking operations", the bank’s immediate financial needs could be, at least, partially secured.
      In fine, a bank restructuring operation could partially avoid for the taxpayers to pay for errors which are not theirs but mainly those of the bank in jeopardy.

    • 2 - Banks’ social responsibilities

      The essential role of banks is, in given economic environments, to contribute to the development of businesses as well as to facilitate households’ consumptions.
      Contrarily to the above for the last several decades an obvious drift could be observed : banks reducing their participation into the real economy to strengthen their activities in favour of the financial markets i.e. the virtual economy.
      Hence, the today’s continuous surge of word wide banking crises which should not come as a surprise.

    • 3 - Causes

      • External
        1. A growing trend in favour of complex financial instruments and derivatives, to the detriment of financings to the real economy.
        2. The inadequate bankruptcy regulations as well as the control bodies’ relative passivity to sanction the delinquent banks.
        3. The auditors’ failures and sometimes even their complacency.
        4. The concept of "universal bank" which allows banks to pretend to excel in all areas, which is a total nonsense.
        5. The concept of "too big to fail", which provides the banks with an expected Governments’ support in case of financial difficulties.
        6. The malfunction of the legal system which is careful not to take the appropriate sanctions provided by the law against the failed banks’ leaders.
      • Internal
        1. Sometimes accounts are cooked, especially as regards to the systematic lack of provisions with regards to bad credits, derivatives and other toxic assets. The purpose of these wrong accounting practices is to show, at financial year ends, oversized profits to satisfy the requirements of the shareholders and stock- exchanges.
        2. Malfunctions of control especially with regard to credit and derivatives.
        3. The excessive volume of the derivatives granted to "virtual economy" compared to the volume of credits granted to the "real economy".
        4. The use of multiple accounting tricks: securitization, credit enhancement, R.W.A, with the sole purpose to hide toxic assets and therefore reduce the need for provisions.
    • 4 - False labels

      In order to avoid speaking of "banking crisis", a label that has a definite negative flavour to the public, economics, politic leaders as well as journalists prefer to hide the reality; it is thus spoken of :

      • the sovereign debt crisis,
      • the crisis of the Euro,
      • the economic recession,
      • deflation,
      • the real problem, namely the weakness of some countries’ banking systems is thus hidden to the public.
    • 5 - False solution

      Would be to put at the disposal of a country with a bank in jeopardy the necessary funds to bailed out this bank. Indeed, if the reasons for these bank’s difficulties have not previously been :

      • fully analysed, and if
      • the necessary corrective actions have not been undertaken.

      the additional funds will be of no use, indeed :

      "the same causes will produce the same effects".

    • 6 - False priority

      Priority is given to the immediate financial answer to the current problems, without worrying about the causes of said problems.
      If an analysis "Department by Department" of all the malfunctions’ real causes is not carried out, and if it is not put into place for each of the identified malfunctions a realistic answer, any money invested into the bank in jeopardy will have been in pure loss.

    • 7 - The actors responsible for the rescue of an endangered bank

      They should be in the following order :
      • The shareholders,
      • The creditors,
      • Depositors whose bank balances are ≥ € 100 000.

      When it is felt by the finance authorities that, depositors whose banks’ balances are higher than € 100 000 could be called to participate in a bank’s rescue operation, what will be the protection of the depositors.
      The deposits will be protected up to € 100 000; the States undertake to guarantee and repay the protected balances within 7 days.
      This provision is an obvious incentive for larger depositors to flee to warmer climes.

    • 8 - Liability

      In some cases social catastrophic situations have been created by banks’ irresponsible officers, the citizens can only suffer their damages in silence.
      It is necessary to insist that the banks’ Managers are in charge of a public service, thus they carry a personal and social responsibility.
      When it has been proved that either the incompetence or the irresponsibility or the dishonesty of some banks’ Managers has been the main cause which led to these banks’ failures, said Officers should be personally sued by the Public Authorities.


    When a bank restructuring is necessary, it is advisable to respect certain basic principles and put into play some essential skills.

    • 1 - Basic principles

      1. Establishment of accurate needs in provisions for credits, financial instruments and other expenses.
      2. Recognition of exact expenses and revenue leading to accurate year end profits.
      3. Non-payment of real dividends, real bonuses and taxes from inaccurate profits.
      4. Audit of all the bank’s Departments and implementation of all the necessary restructuring measures.
      5. Focusing on the credit activity and not any more on the derivative one.
      6. Implementation of training programmes addressed to all Bank’s departments.
    • 2 - Required characteristics to carry out a bank’s restructuring assignment

      •  Personal abilities :
        1. Facts’ objective analysis.
        2. Ability to resist internal and external pressures.
        3. Management expertise.
        4. Completion of undertaken tasks.
        5. Training capability.
        6. Communication skills.
        7. Languages :
          • Current : French, Spanish, English.
          • Good level : German.

      • Professional skills :
        1. Solid experience in commercial banks’ operations particularly in the areas of credit and control.
        2. Audits for all the departments of commercial banks and financial companies.
        3. Proposals to put into place all the required reorganisation measures.
        4. Ability to set up new structures each time it is appropriate.
    • 3 - Professional background

      1. Asmara, Eritrea, 01-2003 to 04-2003, World Bank mission: transformation of an Investment Bank into a commercial bank.
      2. Sanaa, Yemen: restructuring of the most important public bank in the country, Yemen Bank for Reconstruction and Development, YBRD, World Bank mission.
      3. Thailand: audits of ten companies financial, World Bank mission ; Recommendations of restructuring measures and proposals for their futures made to the Governor of the Bank of Thailand.
      4. Congo-Brazzaville: liquidation of a Development Bank, World Bank mission.
      5. Antananarivo, Madagascar, Analysis of the Malagasy banking system, World Bank mission.
      6. Algeria: to set up a finance company whose role was to restore the communications between the ten major state-owned companies and their respective banks; Organization of the United Nations Industrial Development, UNIDO, mission.
      7. Paris, France: General Controller, International Bank for West Africa.
      8. Côte d'Ivoire, Abidjan: General Manager, International Bank for West Africa.
      9. Nigeria, Lagos, International Bank for West Africa, IBWA:
        • Network Director, reorganization of the credit and operations Departments for 65 branches.
        • Director of Finance in charge of Accounting and Information technology.
      10. Venezuela, Caracas, Bank of America: monitoring the accounts of ten state-owned companies.
      11. United Kingdom, London, Bank of America: credit appraisal for credit applications stemming from German, Austrian agencies and the Frankfort office in charge of Eastern Europe countries.
      12. Fort de France, Martinique, Bank of America, Assistant Director.
      13. Paris, Bank of America: participation into the establishment of a unit for films financings.
    • 4 - Collaboration

      Concerning bank restructuring missions, the collaboration of top Officers from the Ministry of Finance and the Central Bank will be essential for their final successes.

    • 5 - Studies

      1. École Supérieure de Commerce de Paris (ESCP).
      2. License in private Law, with Honours, (Paris Faculty of Law).
      3. Graduate in Business Law (Paris Faculty of Law).
      4. Harvard Business School, Advanced Management Program.
    • 6 - Conclusion

      Today I could work with :
      • Commercial Banks which wish to reassess and improve their Credit and Operations, put into place training seminars for Banks’ Senior Executives.
      • Government entities: Central Banks and Ministries of Finance who wish to reassess some of their commercial banks’ strengths and weaknesses.
    • 7 - Contacts

      Raymond Biré.
      Cell phone : +33 6 44 78 30 54
      Mail : This email address is being protected from spambots. You need JavaScript enabled to view it.
      Mail : This email address is being protected from spambots. You need JavaScript enabled to view it.