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Yale University EliScholar – A Digital Platform for Scholarly Publishing at Yale YPFS Documents (Series 1) Browse by Media Type 10-17-2008 Austrian banks, c.bank bail out troubled Constantia Thomson Reuters: Reuters Follow this and additional works at: https://elischolar.library.yale.edu/ypfs-documents Recommended Citation Thomson Reuters: Reuters, "Austrian banks, c.bank bail out troubled Constantia" (2008). YPFS Documents (Series 1). 10880. https://elischolar.library.yale.edu/ypfs-documents/10880 This Document is brought to you for free and open access by the Browse by Media Type at EliScholar – A Digital Platform for Scholarly Publishing at Yale. It has been accepted for inclusion in YPFS Documents (Series 1) by an authorized administrator of EliScholar – A Digital Platform for Scholarly Publishing at Yale. For more information, please contact elischolar@yale.edu. 6/3/2021 UPDATE 2-Austrian banks, c.bank bail out troubled Constantia | Reutershttps://www.reuters.com/article/financial-austria-constantia/update-2-austrian-banks-c-bank-bail-out-troubled-constantia-idUSLH27432620081017 1/3BANKSOCTOBER 17,  2008 / 2:21 AM / UPDATED 13 YEARS AGOUPDATE 2-Austrian banks, c.bank bail out troubledConstantiaBy Eva Komarek, Boris Groendahl(Adds central bank governor comment, detail throughout)VIENNA, Oct 17 (Reuters) - Five Austrian banks have taken over Constantia Privatbank aftera liquidity squeeze at the closely held bank in Austria’s first such bailout for two years,financial authorities said on Friday.Central bank governor Ewald Nowotny told Reuters the bank was relevant to Austria’sfinancial health because it had a fund business managing 10 billion euros ($13.5 billion) inclient assets.“Constantia is managing 300 funds and is from this aspect relevant for the stability ofAustria’s financial system,” Nowotny said in a telephone interview. The bank itself has abalance sheet total of only 1.2 billion euros.The bank had suffered deposit withdrawals recently which brought it into a liquidity squeezedespite a sound capital basis, he said.Nowotny said Constantia’s problems were not directly caused by the financial marketturmoil, but by internal issues involving the bank’s management that also made theownership change necessary. He declined to elaborate.“The problems were linked to the specific situation of this bank, and an ownership changewas the only way to restore trust in a sustainable manner,” he said.NOW READING UPDATE 2-Austrian banks, c.bank bail out troubled ConstantiaPalestinians see little difference inold and new Israeli l…44 MINUTES AGONo seditious conspiracy chargesemerge in U.S. Capitol riot…AN HOUR AGOMinnintersAN HWorld Business Markets Breakingviews Video More6/3/2021 UPDATE 2-Austrian banks, c.bank bail out troubled Constantia | Reutershttps://www.reuters.com/article/financial-austria-constantia/update-2-austrian-banks-c-bank-bail-out-troubled-constantia-idUSLH27432620081017 2/3Under the bailout, UniCredit's CRDI.MI Bank Austria, Erste Group Bank ERST.VI,cooperative banking groups Raiffeisen Zentralbank (RZB) and Volksbanken, and BAWAG areproviding 400 million euros in liquidity to Constantia.Sources familiar with the situation said that Bank Austria, Erste and RZB were injecting 100million euros each, with Volksbanken and BAWAG sharing the remaining 100 million euros.The liquidity is backed by a government guarantee.The central bank is topping up the amount with another 50 million euros.The five banks are also taking over ownership of Constantia via a special purpose vehicle,according to a statement by the central bank and watchdog FMA.PROSECUTOR PROBEAustrian prosecutors said earlier this week they were investigating a report by financialwatchdog FMA which could lead to charges of false accounting against Constantia.The allegations are linked to two property firms, Immofinanz IMFI.VI and ImmoeastIMEA.VI, which were started by Constantia in the 1990s and were both managed by KarlPetrikovics, a manager who was also on Constantia's board.Petrikovics stepped down last week and the property firms subsequently disclosedinvestments with off-balance sheet vehicles in Liechtenstein. Austrian media also reportedConstantia had owned a stake in Immofinanz it had not reported.Two sources familiar with the situation said media reports about the investigations hadcaused deposit withdrawals at Constantia which then led to a short-term liquidity shortfall of100 million euros, triggering the intervention.“This shortfall emerged because of media reports regarding the bank’s trouble relating toImmofinanz,” one of the sources said. “This made it difficult to get fresh liquidity.”Nowotny confirmed there had been withdrawals but declined to go into details.NOW READING UPDATE 2-Austrian banks, c.bank bail out troubled ConstantiaPalestini ns s e little difference inold and new Israeli l…44 MINUTES AGONo seditious conspiracy chargesemerge in U.S. Capitol riot…AN HOUR AGOMinnintersAN H6/3/2021 UPDATE 2-Austrian banks, c.bank bail out troubled Constantia | Reutershttps://www.reuters.com/article/financial-austria-constantia/update-2-austrian-banks-c-bank-bail-out-troubled-constantia-idUSLH27432620081017 3/3Austria’s parliament is due to approve the government’s new 100 billion euro bank rescueplan on Monday. The Constantia bailout was orchestrated under the existing legal structure.(Additional reporting by Sylvia Westall; Editing by Quentin Bryar and Jon Loades-Carter)Our Standards: The Thomson Reuters Trust Principles.Apps Newsletters Advertise with Us Advertising Guidelines Cookies Terms of Use PrivacyDo Not Sell My Personal InformationAll quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.© 2021 Reuters. All Rights Reserved.NOW READING UPDATE 2-Austrian banks, c.bank bail out troubled Consta tiaPalestinians see little diff rence inold and new Israeli l…44 MINUTES AGONo s ditious conspiracy chargesemerge in U.S. Capitol riot…AN HOUR AGOMinnintersAN H

Austrian banks, c.bank bail out troubled Constantia

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Austrian banks, c.bank bail out troubled Constantia

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