Rebirth of England.

Chapter 739 High Efficiency

Also in early March, the Greek government admitted that it was negotiating with several banks, including JPMorgan Chase, on a loan of up to 50 billion euros that was due to mature in the next six months, hoping to postpone its maturity and promising to continue paying interest normally during this period.

According to relevant media reports, of the 50 billion euros of loans that are about to expire for the Greek government, at least half of them come from Wall Street, and these banks have all purchased CDS (credit default swap) bonds from financial institutions under the LCR Rothschild Group. That is to say, if the negotiations between the two sides fail this time and the Greek government defaults on its debts, then the LCR Rothschild Group will need to repay these loans on behalf of the Greek government in accordance with the agreement.

Some people may ask, since it is known that LCR Rothschild Group needs to repay these loans according to the CDS agreement when Greece cannot repay the debts on time, why doesn’t the Greek government simply declare a debt default and let LCR Rothschild Group repay these loans?
Because this is not a thing at all.

Simply put, the debt between Greece and the banks is a matter between the two parties. Even if it defaults, it does not have to be repaid. At most, it can be resolved through negotiated reductions (with conditions attached, of course) and extended interest payments.

Moreover, once a debt default occurs, the consequences will be very serious. The first thing to be affected is that the country's credit rating will be downgraded and its bond interest rates will increase, which means that the country's financing costs will rise sharply, or even that it will no longer be able to raise funds - after all, even if the interest rate is high, banks need to consider whether they can recover the principal they lent.

But what we need to consider is, is it so easy not to pay back Wall Street’s money?
For example, when Argentina declared a debt default in 2001, Wall Street creditors did not tolerate Argentina's stubbornness and directly asked the United States to seize Argentina's warships and prepare for public auction - this would be a very humiliating thing for a country.

In addition, they also lobbied the United States to freeze all of Argentina's overseas assets and prepared to exclude it from all international capital markets, making it completely impossible for Argentina to obtain any financing or overseas investment...

In the end, Argentina gave in and admitted its mistakes...

With this incident in mind, Greece naturally needs to think carefully.

But even if Greece can agree to an extension of its repayments, it will not affect Wall Street banks' claims against the LCR Rothschild Group.

Because the CDS agreement between banks and financial institutions has nothing to do with Greece's repayment, it is equivalent to an insurance agreement, or can be regarded as a bet agreement.

The gamble is whether Greece can repay the loan within the stipulated period.

After all, to reach this CDS agreement, the bank needs to pay fees (premiums) to the financial institution every year. If Greece cannot repay the loan, the financial institution will lose the bet and will need to repay with specified funds. This "specified funds" is often the amount of the loan from Greece that the bank has insured.

It is worth mentioning that when financial institutions sell CDS agreements to banks, they will measure the default cost of the loan and the financial situation of the borrower to decide whether to provide insurance and the annual underwriting fees.

But since the agreement has been reached, if the borrower fails to repay the loan within the stipulated time, they will have to pay the corresponding amount. This can only be blamed on the German financial institution, which was too optimistic about Greece's repayment situation, or short-sightedly focused on the higher annual premium in the CDS agreement.

When LCR Rothschild Group acquired this financial institution, in order to cut off William Weber Capital, it did not conduct a thorough background check, which ultimately led to the current result.

What they need to face now is the repayment of CDS agreements of nearly 25 billion euros within half a year. If all their CDS agreements need to be repaid, the total amount will exceed 50 billion euros!
In addition, LCR Rothschild Group needs to pay a fine of 5 million euros to the French government for losses caused by the transfer of NM Rothschild Bank's proprietary business, as well as face collective claims from customers. In the most optimistic scenario, the final amount of compensation to be paid will not be less than 30 billion euros!
This is not the end. Due to the claims faced by LCR Rothschild Group due to many incidents, some other shareholders of LCR Rothschild Group have united to launch a lawsuit against the major shareholder, the Rothschild family.

The Rothschild family owns nearly half of the shares of LCR Rothschild Group and therefore has always had a firm control over the group.

Some small and medium shareholders of LCR Rothschild Group believe that the current predicament of LCR Rothschild Group is caused by the numerous mistakes and irregular operations of the Rothschild family. Therefore, they demand that the Rothschild family compensate them for their losses. The amount of compensation claimed by these people is as high as 30 billion euros!
It can be said that the Rothschild family is now facing a very critical situation.

On March 3, the French Financial Markets Authority announced that in addition to the 14 million euro fine they issued to NM Rothschild Bank, several bank executives, including Benjamin Rothschild, the former president of NM Rothschild Bank, reached a plea agreement with them, and the court sentenced these executives based on this agreement.

Among them, Benjamin Rothschild received a two-year sentence and will serve his sentence in a prison near Paris.

No one raised any objection to the verdict, nor did they appeal.

It can be said that this investigation into NM Rothschild Bank has demonstrated the unprecedented efficiency of the French Financial Market Authority...

The day after that, David Rothschild, chairman of LCR Rothschild Group, asked the government for a bailout, saying that if LCR Rothschild Group went bankrupt, it would cause irreparable damage to the French economy.

In response, France stated that the situation faced by the LCR Rothschild Group was entirely caused by their own mistakes and errors, and the government cannot use taxpayers' money to pay for it.

But they said they could help them negotiate with some French banks and companies to help LCR Rothschild Group overcome its difficulties, but they had to pay for their own mistakes.

The attitude of the French side is very clear, that is, they will try their best to maintain the stability of most of the LCR Rothschild family's industries, but after that, whether these industries still belong to the Rothschild family is not what they care about, as long as they do not cause too much impact on the French economy.

(End of this chapter)