A look back…
Natixis SA is a large French corporate and investment bank that took a big ‘hit’ in the fall of 2008 when the massive Bernard Madoff $50 billion mega-fraud ponzi scheme blew up on its books and on the books of a lot of other big ‘players’ in the world of global finance.
Natixis’ exposure in the Madoff fiasco was estimated at 450 million euros ($605 million).
Natixis had also during this time been riding the red-hot subprime bandwagon, and when the mortgage default wave steamrolled through, Natixis’ got walloped again. Their write-downs topped out at $1.75B.
Natixis needed liquidity to survive, and the got it – courtesy of the U.S. Federal Reserve (and, indirectly, U.S. taxpaying citizens).
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Bloomberg Nov 28, 2011 – Excerpts:
Natixis SA reported the biggest net losses of any French bank during the financial crisis and kept an outstanding balance of more than $10 billion of loans from the U.S. Federal Reserve for six months. The loans peaked on Dec. 22, 2008, when the Paris-based bank was borrowing $15.5 billion from the Fed’s Commercial Paper Funding Facility and Term Auction Facility.
In February 2009, Natixis‘s main shareholders, Groupe Banque Populaire and Groupe Caisse d’Epargne, announced they would merge to form Groupe BPCE, and the French government bought about 3 billion euros ($4.25 billion) of preferred shares in the combined entity and 4 billion euros of subordinated debt. The deal closed in July 2009. Natixis paid off the last of its Fed loans in January 2010.
Peak amount of debt on 12/22/2008: $15.5B
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And so, here we have a large foreign corporate and investment bank getting sucked into the Madoff mega-fraud ponzi scheme… and the hot subprime mortgage market roller-derby, losing big…. and then getting bailed out by the U.S. Fed.
Natixis tapped the Fed’s Commercial Paper Funding Facility, Term Auction Facility and Discount Window for a cool $15.5B.
‘Thank you,’ U.S. taxpayers…
And now it is time for fair play. U.S. citizens deserve nothing less than the same access to U.S.-generated liquidity that was so generously extended to Natixis, and many banking heavyweights… during their ‘time of need.’
The mechanism: A Federal Reserve – U.S. Treasury Citizens Credit Facility.
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