Chapter 739 High Efficiency

Also in early March, the Greek government admitted that it was negotiating with several banks, including JPMorgan Chase, on a loan of up to 5 billion euros that was due in the next six months, hoping to postpone its due date and promised to continue to pay interest normally during this period.

According to relevant media reports, at least half of the 5 billion euros of loans due by the Greek government came from Wall Street, and all these banks purchased CDS (credit default swap) bonds from financial institutions under the LCR Rothschild Group. In other words, if the negotiations between the two sides fail this time and the Greek government defaults on its debt, then the LCR Rothschild Group will need to repay these loans on behalf of the Greek government in accordance with the agreement.

Some people may ask, since it is known that the LCR Rothschild Group needs to repay these loans in accordance with the CDS agreement when Greece cannot repay its debts on time, then why doesn't the Greek government simply declare a debt default and let the LCR Rothschild Group repay these loans?

Because this is not a matter at all.

Simply put, the debt between Greece and the bank is only a matter between the two parties. Even if it defaults, it is not repaid. At most, it can be resolved through negotiated reductions (of course, there will be conditions attached) and extended interest payments.

And once the debt defaults, the consequences will be very serious. The first thing to bear the brunt is that the country's credit rating will be downgraded, and its bond interest rates will increase, which means that the country's financing costs will rise sharply, and it may even be impossible to finance at all - after all, even if the interest rate is high, banks need to consider whether they can recover the principal they lent.

The only thing to consider is, is it so easy not to pay back Wall Street's money?

For example, when Argentina announced its debt default in 2001, facing the stubborn Argentina at the time, Wall Street creditors did not indulge him and directly asked the United States to seize Argentina's warships and prepare for public auction - this would be a very humiliating thing for a country.

In addition, they also lobbied the United States to freeze all of Argentina's overseas assets and planned to exclude it from all international capital markets, making it completely impossible for Argentina to obtain any financing or overseas investment...

In the end, Argentina still gave in and honestly admitted its mistakes...

With this incident in mind, Greece naturally needs to weigh it.

But even if Greece can reach an extension of repayment, it will not affect Wall Street banks' claims against LCR Rothschild Group.

Because the CDS agreement between banks and financial institutions has nothing to do with Greece's repayment, it is equivalent to an insurance agreement, or it can be regarded as a bet agreement.

The bet is whether Greece can repay the loan within the prescribed period.

After all, to reach this CDS agreement, banks need to pay fees (premiums) to financial institutions every year. If Greece cannot repay the loan, then the financial institution fails in the bet and needs to repay with the prescribed funds. This "prescribed funds" is often the amount of the loan to Greece insured by the bank.

It is worth mentioning that when financial institutions sell CDS agreements to banks, they will measure the default cost of the loan and the borrower's financial situation to decide whether to insure and the annual underwriting fee.

But since the agreement has been reached, if the borrower does not repay the loan within the specified time, they will need to pay the corresponding amount.

This can only be blamed on the German financial institution that was too optimistic about Greece's repayment situation, or short-sightedly focused on the higher annual premium in this CDS agreement.

When LCR Rothschild Group acquired this financial institution, in order to intercept William Weber Capital, it did not conduct a thorough background check, which eventually led to the current result.

Now they need to face nearly 2.5 billion euros in CDS agreement repayments within half a year, and if all their CDS agreements need to be repaid, the total amount will exceed 5 billion euros!

In addition, LCR Rothschild Group also needs to pay a fine of 500 million euros to the French government for the loss of NM Rothschild Bank's proprietary business transfer, as well as collective claims from customers. In the most optimistic case, the final amount of compensation to be paid will not be less than 3 billion euros!

This is not the end. Because of many events that caused the claims faced by LCR Rothschild Group, some other shareholders of LCR Rothschild Group joined together to launch a lawsuit against the major shareholder Rothschild family.

The Rothschild family owns nearly half of the shares of LCR Rothschild Group, so it has always firmly controlled the group.

Some small and medium shareholders of LCR Rothschild Group believe that it is the Rothschild family's many mistakes and illegal operations that have caused the current predicament of LCR Rothschild Group, so they demanded that the Rothschild family compensate them for their losses. The amount of compensation claimed by these people is as high as 3 billion euros!

It can be said that the current situation faced by the Rothschild family is very critical.

On March 14, the French Financial Market Authority announced that in addition to the 500 million euro fine they issued to NM Rothschild Bank, several bank executives, including Benjamin Rothschild, the former president of NM Rothschild Bank, reached a plea agreement with them, and the court sentenced these executives according to this agreement.

Among them, Benjamin Rothschild received a 2-year sentence and will serve his sentence in a prison near Paris.

For this verdict, no one raised any objections or continued to appeal.

It can be said that this investigation against NM Rothschild Bank showed the unprecedented efficiency of the French Financial Market Authority...

The next day, David Rothschild, chairman of LCR Rothschild Group, asked the government for help, saying that if LCR Rothschild Group went bankrupt, it would cause irreparable losses to the French economy.

In response, the French side said that the situation faced by LCR Rothschild Group was entirely caused by their own mistakes and errors, and the government could not use taxpayers' money to pay for it.

But they said they could help them negotiate with some French banks and companies to help LCR Rothschild Group overcome difficulties, but they must pay for their mistakes.

The attitude of the French side is very clear, that is, they will try their best to maintain the stability of most of the LCR Rothschild family's industries, but after that, whether these industries still belong to the Rothschild family is not what they care about, as long as they do not cause too much impact on the French economy.