spanish pensioners pay price of bank share fiasco
Last Updated : GMT 13:26:10
Arab Today, arab today
Arab Today, arab today

Spanish pensioners pay price of bank share fiasco

Arab Today, arab today

Arab Today, arab today Spanish pensioners pay price of bank share fiasco

Madrid - AFP

Every Thursday dozens of pensioners gather outside bailed-out lender Bankia in the Spanish capital with a simple demand: Give us our money back. The pensioners, and many thousands like them across Spain, say they unwittingly became holders of complex and risky \"preference shares\", which their banks had assured were as safe a savings deposit. Those preference share investments quickly became a costly trap. Spanish banks\' balance sheets were strewn with red ink after a 2008 property crash, forcing Spain to prop them up with 42 billion euros ($54 billion) in rescue loans offered last year by its euro zone partners. As one of the conditions of extending the rescue funds, Brussels demanded that holders of preference stock share in their banks\' losses. \"This is shameful! The government knows that Bankia has swindled pensioners,\" said 70-year-old Antonio Rodriguez as he protested in Madrid\'s central Puerta del Sol square outside a branch of the former savings bank Caja Madrid, which merged with six other regional savings banks to form Bankia in 2010. Rodriguez said he poured 72,000 euros ($93,000) into preference shares in Caja Madrid in 2009 after being told by his bank manager that it was a \"safe\" product that would deliver a 7.0-percent annual rate of return. \"If he had told us that we risked losing everything, we would never have signed,\" he said. After Spain\'s decade-long property bubble burst in 2008 sending the economy into a tailspin, savings banks sank into a sea of toxic property loans and they stepped up their marketing of preference shares as they tried to boost their solvency ratios to meet stricter regulatory demands. Nearly one million Spanish depositors, many of them pensioners, poured money -- in some cases their entire life savings -- into preferred shares issued by their banks, according to banking consumer association ADICAE. \"No other European country sold preferential shares to small savers. The pressure of the banking lobby in Spain is enormous,\" said ADICAE spokesman Fernando Herrero. But as Spain\'s economic downturn deepened the value of the preferred shares plunged and it made it effectively impossible to resell them. Small investors bought 30 billion euros in preferred bank shares, which are not protected by the government\'s deposit guarantee fund, according to ADICAE. Bankia, the largest of four lenders which the government was forced to nationalise, alone has 3.9 billion euros of preference shares distributed among tens of thousands of its clients while Banca Civica, which was bought by larger rival La Caixa last year, has 9.0 billion. \"Bankers needed to take money where they could find it, which is in the hands of old people who are the biggest savers,\" said 75-year-old Antonio Baraona Ortiz, one of the protesters outside of Caja Madrid in Puerta del Sol. \"I worked at night. We raised four children. We made a lot of sacrifices to save 68,000 euros and they have stolen it all,\" he added. The European Union, which last year agreed to lend Spain up to 100 billion euros to help the country shore up its banks, has insisted that bank customers who bought preferred shares would have to absorb losses. Spain has so far received 41.4 billion euros from its euro zone partners to fix its troubled financial industry. Numerous legal cases have been brought by bank clients who allege they were sold risky products as secure deposits and some have succeeded in winning their money back. This month, the Spanish ombudsman\'s office recommended that all banks that received state aid such as Bankia undergo \"universal arbitration\" regarding the sale of preference shares. The ombudsman\'s office has received 1,274 complaints over the sale of preferred bank sales since 2011, most from elderly bank clients. Finance Minister Luis de Guindos has said preference shares should never have been sold to retail savers but he backs arbitration only in cases where it can be shown that \"buyers did not understand what they were buying\". Nemecio Martin, a 70-year-old pensioner who invested 42,000 euros in preference shares, which he had planned to use to pay for his stay in a retirement home, is anxiously waiting for a solution. \"If I can\'t pay, where will I go? Will I wait under a bridge to die?,\" he said.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

spanish pensioners pay price of bank share fiasco spanish pensioners pay price of bank share fiasco

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

spanish pensioners pay price of bank share fiasco spanish pensioners pay price of bank share fiasco

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today PNG police start removing refugees

GMT 03:00 2017 Friday ,24 November

PNG police start removing refugees
Arab Today, arab today Sophian Yussef reveals suitable decoration

GMT 02:56 2017 Thursday ,23 November

Sophian Yussef reveals suitable decoration
Arab Today, arab today Syria congress to go ahead

GMT 02:24 2017 Friday ,24 November

Syria congress to go ahead
Arab Today, arab today IS media offline for a day

GMT 02:10 2017 Friday ,24 November

IS media offline for a day
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Human form of 'mad cow' disease

GMT 00:11 2017 Friday ,24 November

Human form of 'mad cow' disease
Arab Today, arab today British woman jailed in Iran to appear

GMT 03:19 2017 Friday ,24 November

British woman jailed in Iran to appear
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mitsubishi Materials units falsified product

GMT 03:24 2017 Friday ,24 November

Mitsubishi Materials units falsified product
Arab Today, arab today 'Robo-taxis' hold promise, and perils

GMT 08:07 2017 Thursday ,23 November

'Robo-taxis' hold promise, and perils
Arab Today, arab today Solaf happy for participating in “Hotline”

GMT 07:56 2017 Wednesday ,22 November

Solaf happy for participating in “Hotline”
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 08:03 2017 Tuesday ,21 November

Abeer Sabry reveals reason of “The Flood” success

GMT 08:03 2017 Thursday ,23 November

Srebrenica women cry tears of joy

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts

GMT 09:12 2017 Thursday ,23 November

4 in 10 cancers due to modifiable risk

GMT 10:47 2017 Wednesday ,22 November

The Big Apple bike boom

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday