A Vatican official already indicted for carrying €20 million in cash into Italy on a private plane now faces money-laundering charges. According to prosecutors, payments that were recorded as donations for a proposed hospice were secretly paid out again. Around 50 people across Italy, including government officials, are thought to have been involved in this and closely related schemes. The defendant claims he was only acting as accountant and courier, and says higher officials in the Roman Catholic Church directed the irregular money movements.
In China, a bank-run hedge fund is expected to default at the end of the month. Credit Equals Gold #1 Collective Trust looks on the surface like a Ponzi scheme with its promise of 10 percent annual returns, but on closer inspection it is actually just a high-risk investment fund backed by a government-owned bank. High-yield investments naturally carry a greater risk of failure, and a failed coal mining investment is being blamed for the fund’s insolvency. There has been some speculation of a government bailout, but that is probably impossible because of the budget impact and the precedent it would create. As financial analysts have been pointing out for a couple of years, China is not a large enough country to bail out its entire banking system, and most of the system is experiencing financial stress in one form or another in the aftermath of a series of official programs to pump up the economy.
Standard Chartered Bank is floating rumors of a takeover in what looks like an urgent attempt to find a buyer. When asked about it, though, the bank denies that it is having problems or is seeking to be bought out.
The pace of U.S. bank failures may have slowed, but it is not just the smallest banks that are failing. Oklahoma regulators tonight closed The Bank of Union, with branches in Oklahoma City and El Reno, Oklahoma. The bank had $329 million in deposits and a similar amount of assets. With loan losses, the bank had essentially run out of capital. Oklahoma City-based BancFirst is assuming the deposits and purchasing two thirds of the assets.