The Spanish Banksters

 Bankia in Spain posted a record €19.2bn (£16.3bn) loss last year, became the ultimate symbol of Spain’s financial crisis when it had to be bailed out twice, having wiped out the investments of hundreds of thousands of Spaniards.

The government has shifted Bankia’s toxic property assets into a so-called “bad bank”, allowing it to crawl back in profit since the first quarter of 2013. But for those who lost their savings, most of whom are pensioners, there has been no let up. “We were deceived again and again, we ended up with something we never wanted, and we want our money back,” Matias Vazquez Sanchez, 71, told The Independent. http://www.independent.co.uk/news/world/europe/the-great-spain-robbery-pensioners-protest-as-the-watch-their-life-savings-vanish-into-the-banks-black-hole-8921419.html

. After Spain’s property bubble burst in 2008, the banks sought to balance their books, and around 300,000 families say they were encouraged to convert their savings into complex preference shares that typically pay out a fixed dividend. Rather than being warned of the inherent risks, the protesters say they were reassured that as a financial option, the preference shares could not be safer.  80 per cent of those buying preference shares were pensioners, many using their life savings to do so. But in 2012, when Bankia, Spain’s fourth largest bank, was nationalised along with three other lenders and bailed out with €42bn in EU rescue loans, those small investors found themselves partly shouldering the banks losses, as stipulated by Brussels’ rescue conditions. Thus Spanish pensioners who had collectively bought around €30bn in preference shares saw their investments’ real value plummet, and their savings go up in smoke.

Felix Pastor said his bank told him he was “a VIP client” when selling him preference shares, because he “had no mortgage”. He says he lost €104,000 in Bankia preference shares. “It was all a lie,” he said.  “A generation of Spain’s elderly has been robbed of their right to die in peace”

 The 91-year-old father of Federico Jarque  invested €60,000 in Bankia preference shares. “Imagine how my father feels when they tell him, at his age, that at best he may get some money back in 10 years’ time,” says Mr Jarque. “He’s in an OAP home, he can’t use the money he’s been saving all his life and we don’t know what is going to happen. He trusted the bank, and when the manager told him about preference shares he said that it had a bit more interest and that it was completely safe. But it was actually a product that was a complete con, we weren’t informed of the real risks.”

Some of the banks’ sales staff were instructed to tell pensioners that they had sold the same preference shares to their own families. When the customers came in and started shouting at the managers saying they’d been conned, the banks had shifted their staff around to different offices so the new ones could say ‘well it wasn’t us who was responsible’.

As for those in charge of Bankia at the time of the sale of the preference shares, Rodrigo Rato, the bank’s former chairman and ex-government Minister of Finance continues to loom large in Spain’s financial world. He recently became a consultant for Santander.