* "Bail-in" for the rescue of Hypo Alpe-Adria-Bank and Kommunalkredit?
The European banking crisis is becoming increasingly interesting. Two Austrian banks have begun appearing increasingly often in the headlines of the press agencies, accompanied by losses of billions of Euros which they can cause to the state's budget.
The two banks are Hypo Alpe-Adria-Bank and Kommunalkredit, both of them nationalized in 2009, and 2008, respectively, amid a major liquidity crisis.
The funds injected directly in to them for recapitalization, as well as the government guarantees for the bonds issued by the two banks, were conditionally accepted by the European Commission.
Five years later, the truth about the state of the two banks is increasingly hard to conceal. It has been proven that the problem was one of solvency, and that the restructuring programs did not produce the funds expected to come from the divestment of assets. Now, "nobody wants to help Hypo Alpe-Adria", according to German financial newspaper Handelsblatt.
But who is Hypo Alpe-Adria? The bank was created in 1896 and has remained a regional financial institution until the end of the 80s, according to the presentation in its annual report for 2012. Then came its regional and international ambitions, which led to "a period of aggressive growth, without any risk limitations and far too optimistic assessments of the potential, in the context of serious operating deficiencies, on all the bank's segments", according to the annual report.
At the end of 2012, Hypo Alpe-Adria had total assets of 33.8 billion Euros, of which 24.4 billion were the loans granted to customers. The main financing sources were the issued bonds (14.8 billion Euros), customers' deposits (8.4 billion) and loans from other financial institutions (5.25 billion Euros).
But why should Hypo Alpe-Adria be helped?
