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Sunday, April 29, 2012

The Damn Cam Bank!

The Bank has lost it's shine

As a customer of the banking system I am not a very happy person. In that, I believe that I have no shortage of company as people have lots of reasons to hate their banks, and the bankers who run them. This has not been a good decade for banks around the world.

It had always been my perception that I should take my savings to my banker who would protect my money, and who would advise me how best to make my money grow safely. If I wanted to chance more than ordinary growth, I expected my banker to advise me on the degree of risk I was contemplating. In other words, my banker was a professional in whom I could place absolute faith and trust.

I came to Spain in 1999 and I found that houses had walls around them, and the windows and doors were protected by iron bars, much like a prison. I thought that people here went to extraordinary lengths to protect their furnishings, but I was told that it was about protecting their money which was kept under the mattress because they didn't trust the banks. How right they were!

In the decade since, my bank in Bermuda has very nearly fallen over the edge into bankruptcy. I hold an account with Banco de Valencia, which now finds itself under protection of Banco de España because its accounts have a hole nearly one billion euros deep.How does a bank lose one billion euros? I continue to trade with them and my funds have been liquid to me, and they are guaranteed by Banco de España, but I am wary and keep a low balance in that institution.  However, I also opened an account with the Cam Bank because it is located closer to my home, and the image of The Cam was bright, trustworthy and convenient.

I was approached by a senior officer of the bank who was on a mission to convince me that I should seriously consider cementing my relationship with Cam by investing in Cam's products. He didn't mention specifics, but I assumed he meant I should buy Cam shares. The main point is that it was not very long after that encounter that the shit hit the fan, and it is now emerging that thousands of Cam's clients have lost all of their money because of what Cam did with the money entrusted to them.

In a newspaper article written and published by The Costa Blanca News, the spokeman for Cam Bank, Juan Valdés Castelló is reported to have said the following which I am quoting out of context: " Once the restructing planned is carried out, the entity is today amongst the most solvent in the Spanish financial system."  That may be so, but if we look in the distance we will see the horse running over the hill. It is a bit late to be bolting the barn door.

A lawyer and financial expert, Francisco Iniesta, in a public speech, is reported to have stated that " investors have not lost their money- they just cannot get at it." No, investors cannot use this money in anyway at all, and I think that they never will. That to me is as clear a definition of loss as I think you will find anywhere.

He went on to say that banks should not expect their clients to be financial experts, but he says that the former Cam directors appear to have chosen elderly, long-term clients who trusted in the advice of managers whom they knew. So, my question is, what's the difference between such directors/managers and the mafia?

Apparently, the crime that was committed involved three forms of investments, all of which are described as being highly complex and risky, so much so that knowledgeable investment managers would avoid putting any money into them. These are open-ended contracts that the investor can only get out of if the bank redeems the investment, or if the investor can get a greater fool to buy them from him. The bank apparently put their client's money into these contracts calling them "Combined Savings Deposits."

A protest group made of Cam clients, called Plataforma CAM alleges that managers declared that clients knew very well the products they acquired and that they, (the clients) were properly informed.They allege that they have found clauses in certain contracts that state that investors may lose the investment made; and that the entity (bank) is not obliged to evaluate the suitability of the investment; and even that the client was informed that the requested investment is not suitable for them, but insisted on making the investment anyway.  If Plataforma CAM are right about any of these allegations it defies common sense and logic that anyone with the capability to think for himself would place even a penny in any of the investments. I didn't!

Such actions on behalf of directors and staff seem to me to be unfeeling, uncaring, and darn right theft. During the time of Franco many people were simply made to disappear for reasons less than the behaviour I have noted. Fortunately the country has moved on, but I hope that prision authorities are making ready as many cells as are necessary for very long stays, as there are a number of people heading that way who should draw their last breath of freedom. Once they are sent to jail we never want to see them again.

Now you know what I mean by The Damn CAM Bank!

Copyright (c) 2012   Eugene Carmichael