Chapter 732 Collapse

"We have reviewed the credit default swap (CDS) agreements between our subsidiaries and several banks. It is certain that although the agreements have certain repayment risks at present, they are far less serious than what the media reported..."

Soon, LCR Rothschild Group responded to the overwhelming reports about the CDS agreements between their subsidiaries and those Wall Street banks that bound Greek debt:

"We are communicating with the insurers of the CDS agreements, including Goldman Sachs, and believe that this matter can be properly resolved. At the same time, many media reports have exaggerated this matter, which has had a great impact on LCR Rothschild Group. If false reports continue, we will pursue responsibility."

For the media's request that LCR Rothschild Group could disclose the total amount of funds involved in the CDS agreements of their subsidiaries, LCR Rothschild Group refused, claiming that this was a company secret.

For a time, the CDS agreements between LCR Rothschild Group and those Wall Street banks attracted public attention.

You know, although LCR Rothschild Group is no longer a top financial institution in the world, its main business is only in Europe.

But the Rothschild family is very well-known. Many people have heard all kinds of rumors about the Rothschild family, which was once rich enough to rival a country.

Now their LCR Rothschild Group has been pushed to the forefront, and everyone can't help but discuss whether it will end up like the American International Group.

In addition to those ordinary people, I am afraid that the most concerned about this matter at this time are the clients of the LCR Rothschild Group. After all, the assets they help clients manage are still around 70 billion euros. If the LCR Rothschild Group falls, these assets will inevitably be affected.

One wave has not settled, another wave rises.

Just when the CDS agreement of the LCR Rothschild Group was making a lot of noise, a department head of the NM Rothschild Bank suddenly testified to the French Financial Markets Authority (AMF), claiming that the NM Rothschild Bank transferred the losses of its proprietary business through internal transactions, causing their wealth management department to bear at least 2 billion euros in losses caused by proprietary business.

The Financial Markets Authority of France is the highest financial regulatory agency in the country, and its director is appointed by the French Finance Minister himself.

This time, Badu Boyd, who stood up to testify against NM Rothschild Bank, not only told the Financial Markets Authority that NM Rothschild Bank transferred most of its losses from its proprietary business to the wealth management department through certain means, but also provided the Financial Markets Authority with many detailed evidences.

According to Badu Boyd, NM Rothschild Bank previously suffered losses of more than 3 billion euros due to the illegal operations of trader Peter, but NM Rothschild Bank only announced a loss of 1 billion euros. The remaining losses of more than 2 billion euros were transferred to the wealth management department through complex operations, and the customers of NM Rothschild Bank borne this part of the losses.

And Badu Boyd claimed that this was not the first time that NM Rothschild Bank did this. In fact, all these means have long been the "tradition" of NM Rothschild Bank.

The French Financial Markets Authority immediately launched an investigation into NM Rothschild Bank, and they asked Rothschild Bank to seal all transaction data and information for them to check.

At the same time, the relevant French investigation agencies issued a restraining order against NM Rothschild executives, including its president Benjamin Rothschild, prohibiting them from leaving France before the investigation is completed.

"Your Highness, the news from France is that they will only give us ten days, after which they will reach a settlement with the Rothschild family."

Barron was not surprised to hear this result.

After all, think about it, as the Rothschild family has been operating in France for so long and was once powerful, how could it be possible that they have no intricate connections with those politicians in France.

Maybe many people have handles in the hands of the other party.

Now Barron can get these ten days because of the efforts of his allies, plus the fact that Lao Sa and Christine Lagarde are somewhat dissatisfied with the actions of the Rothschild family.

Next, not only was there news that LCR Rothschild Group might suffer huge losses in the CDS agreement, but also news that NM Rothschild Bank would pass on the losses of its proprietary business to its financial management users.

In addition, Barron and his allies began to short the investment in LCR Rothschild Group's wealth management department.

When some clients of LCR Rothschild Group withdrew their investments due to concerns, they found that those investments had begun to shrink significantly.

What is even more frightening is that the redemption prices of many private equity funds are getting lower and lower every day...

There is no doubt that the news that LCR Rothschild Group is about to go bankrupt has begun to spread among these customers.

Even though LCR Rothschild Group has tried its best to appease its customers, claiming that these are only temporary situations and will soon return to profitability...

But just like a bank run, once this happens, it is difficult to stop.

After all, everyone is afraid that they will lose all their money if they run too late.

After the subprime mortgage crisis, the confidence of the European market has not yet recovered, and the Greek sovereign debt crisis has broken out. Now this crisis has a tendency to spread to more countries, and the market is in a state of panic.

Barron's short selling is just going with the flow.

In this case, the value of the holdings of the wealth management department of the LCR Rothschild Group is falling.

And because its core NM Rothschild Bank is under investigation, many of their operations are already restricted.

Now when customers are scrambling to withdraw their investments, they also need to cash out the financial assets they hold, which is a selling behavior in the market itself, and will also contribute to the decline in prices.

Under these factors, the scale of its wealth management has plummeted.

As a last resort, the LCR Rothschild Group can only issue an announcement. In addition to condemning some capital for malicious short selling against them, it also announced a limit on the daily redemption amount of funds.

It can be said that under the current circumstances, this is a completely desperate move - but then again, LCR Rothschild Group has no other options, because now all their institutions are almost surrounded by customers who want to withdraw funds...

Although some customers have withdrawn their funds, they will inevitably be very dissatisfied with LCR Rothschild Group in the face of greatly reduced investments, which also contributed to the collapse of LCR Rothschild Group's reputation at this time.

Finally, just one week later, LCR Rothschild Group had to seek help from the French government. According to statistics, the scale of funds they managed at this time was less than 20 billion euros...

And half a month ago, this figure was 70 billion euros!

Many people know that LCR Rothschild Group is finished.