News 2009

Monday, 8.03.2010

Money laundering in Unicredit and Telecom Italia CLICK

Telecom Italia accounts sized by prosecutor CLICK

The same actors again. Unicredit and Pirelli had co-managed Telecom Italia till October of 2006 just before Telecom became insolvent. In Poland, Pekao SA, Unicredit's Polish subsidiary, was forced by its parent into unfair long term contract with Pirelli. This way Pirelli acquired financial means to pay Unicredit Euro 475 million for worthless shares of Telecom Italia. Another case of money laundering and illigal crossboader transfers…

 

Tuesday, 23.02.2010

Breach of rules on competition and capital transfers by UniCredit CLICK

 

Monday, 24.01.2010

Unicredit won't join toxic asset scheme for now CLICK 

Thursday, 7.01.2010

Parliamentary question by Mr. Ryszard Czarnecki CLICK

Tuesday, 15.12.2009

Parliamentary question by Mr. Ryszard Czarnecki CLICK

Monday, 23.11.2009

Unicredit sued over derivatives by 9 municipalities CLICK

Not yet really back from the Shareholders' Meeting of Unicredit and, here you are, new scandal with Unicredit in it. Project Chopin, Telecom Italia, Bank of Austria take over, Pekao - BPH merger, derivatives sold to small businesses, tax evasion with Barclays help, Argentine bonds, Cassa di Roma, frivolous accounting standards and many more was discussed during the meeting. And Mr. Profumo was not aware of all these schemes, when they took place.

 

Jerzy Bielewicz statement at

UniCredit Shareholders' meeting of November 16, 2009

 

Ladies and gentleman, shareholders of Unicredit Group, Boards' members.

As Chairman of the Association for Transparent Markets I would like to address some of the problem areas connected with the capital increase proposed by our Board.

I shall highlight 4 key points.

My first point relates to the recent International Monetary Fund's Global Financial Stability Report. The IMF indicates diplomatically, without referring to any specific name, that Italian banks do not provide for due consolidation of the losses of their foreign branches and subsidiaries. The IMF bases its consideration on the fact that risks, and therefore losses, are by far greater outside than inside the Euro zone. The IMF points out that the lower the consolidation levels, the less significant are the loss provision rates.

Dear shareholders, I know only one Italian bank to which this statement may apply and this bank is our bank, UniCredit.

At this point, my question is: why does our Board approve an accounting policy that generates such doubts with the Chairman of the IMF and misleads the public? Ladies and Gentlemen of the Board, where are your objections? Where are your demands?

Dear shareholders, as you may know, Unicredit subsidiaries especially in Ukraine, Romania and the former Soviet Union require liquidity support. In the case of Unicredit Ukraine, our Polish subsidiaries Pekao SA injects tens of millions of Euro into the system every quarter but, at the same time, Pekao makes no provision on its investment in Ukraine. No accounting trick will solve liquidity problems. And this is why we are here today.

The Association of Transparent Markets notes Mr. Profumo's numerous statements in the media referring to the so called economic improvements and limited risks related to the Central European countries. At this point where does Mr Profumo's legal responsibility lay? And if the members of the Management Board abdicate their eminent and necessary role, from whom will the truth come from? From the little employees who fear for their job? From the small shareholders? Or from a public authority?

Confronted with the total lack of reaction of the Bank's bodies to our numerous warnings, we have established the Association For Transparents Markets. The Vice Chairman of our association is the former chairman of the Polish Parliamentary Investigation Commission on banks. I am here to tell you, with all my strength, that we are not going to let the Bank's management act secretly against the interest of those shareholders who do not have a privileged control of the Bank. We think that we must share principles of fairness and equal treatment among the shareholders.

When I use the word "secretly", I obviously have in mind the Project Chopin, upon which I have called your attention since 2007, but not only. Ladies and Gentlemen of the management and Supervisory Boards where are your inquiries? Where are your questions? Where are your conclusions? Not even one of you is interested in asking our view, our documents, the reasons of our fight? Nature hates void and putting your head into the sand will not help. Again, if you dismiss your role somebody else will take it and then you will appear as ccomplices of Mr Profumo's inept policy.

My second point refers to the general situation in the financial sector and my source will be again the IMF. According to this eminent international authority, banks have only accounted for a $ 1.5 trillion loss since October 2008. Still, this is less than half of what is required to cover the present risk of all financial institutions. By the end of 2010, $ 1.7 trillion of provisions will have to be passed, affecting the banks' results. The IMF indicates the banking sector as the weakest link of the real economy because it fails to cover the demand for credit, even though this demand has significantly decreased in our days.
The IMF also warns that the present euphoria might be fragile. Today banks invest the cheap money they receive from central banks in speculative activities on the financial market. By doing so, they shift the cost onto the public. This is why you are not fair, Mr Profumo when you state that you do not take advantage of public or taxpayers' money. According to Nobel Price economist and advisor to the US government Mr. Roubini, the speculative bubble is going to burst sooner than latter. I hereby ask Mr. Profumo to give us, today, the consolidated figure of all Unicredit Group's borrowings from the ECB, from the Central Bank of Italy and from all other Central Banks of the countries where we have branches or subsidiaries. I also hereby ask Mr. Profumo to give us, today, the consolidated figure of all our Group's speculative investments on the financial markets.
The Unicredit Board of Directors admits in its comments on this year's third quarter results that: "quarterly trend shows growth in net commissions, trading income which is once again at solid levels and lower net interest income." In other words, Unicredit goes further away from basic banking activities to risky trading.  We get even some meaningful numbers: "Net trading, hedging and fair value income in the first nine months of 2009 amounts to €1.651 billion, a noticeable improvement on the -€730 million reported in the same period 2008." The management calls it "taking advantage of  reduced risk". Mr Profumo, don’t' you feel your statement is a bit arrogant? The swing in trading income, from minus €730 millions to plus €1.7 billion, proves only how much more risk the bank carries on its balance sheet today. Unicredit has learned no lesson from the crisis! And would suffer a great deal, if we enter into a W shape scenario, as predicted by Mr. Rampl himself, Chairman of our Board of Directors.
Mr Profumo, you ask us today for supplementary cash. My next question is: what is your strategy? What will you do, when the quantitative easing will come to an end and interest rates will start rising again, to fight inflation thus eating our spreads? How will our present miraculous profits, based on public money be preserved? How will our market value as a Bank be preserved? Why should we trust you today and vote in favour of this capital increase while your policy has not changed and you go back to the former bad habits?


My third point is the following: in Great Britain and the Netherlands, the markets' regulators and the Central Banks decided to deal with the so called "too big to fall issue". As a consequence, the banks are being downsized and devided into smaller stand-alone financial companies according to their functions. I dare say: "Unicredit Group is one of these 'too big to fall' institutions, as proven by its lack of ethics in dealing with the real economy, with small organisations and shareholders". The Association for Transparent Markets calls for an action in every country where we are present as well as at European level in order to verify the compliance of our actions with the rules of competition. I have in mind not only and again the now famous, but still secret, Chopin project. I hereby inform our shareholders that the Polish prosecutor has accepted at last to open an inquiry on the way the Bank provoked the bankruptcy of the first Polish pasta Group. I have also in mind the political activity of the Bank in Poland and notably the use of this influence in order to control the management of a state owned Bank in Poland which is also our main competitor.

Ladies and gentleman, I will skip such important issues as shrinkage of Unicredit Group in terms of total assets, the fall in corporate lending or multi billion swings on off the balance sheet derivative accounts. For example in the case of Pekao alone, off the balance sheet value of derivative products decreased by approximately 20 billion Euro (2/3 of total assets of the bank) since the beginning of 2009. No explanation whatsoever was provided. Is this pure accounting manipulation? Where is the risk of existing operations accounted for?

And last but not the least, my forth point is the real problem which needs to be addressed immediately – the unlawful drainage of Unicredit's Polish branch, Pekao SA. Unicredit forced its CEE branches into unfair contracts with Pirelli Real Estate SpA. Pirelli bought the Pekao's real estate arm for € 20 million PLN. Six month later, Pirelli sold just 5 real estate projects out of Pekao Real Estate portfolio for € 80 million, that is 300% return in cash in six months. After this transaction the Pekao Real Estate was valued at almost €150 million by an independent third party.  1000% profit in six month – Mr Profumo do you call this an "arms length transactions"? Where is your responsibility? Moreover, Pekao and Pirelli signed a shareholders' agreement by which Pekao without any compensation granted to Pirelli exclusivity rights to all its real estate assets and to all the non performing clients' real estates. The contract was signed for 25 years while you, Mr Profumo were member of the Board of Olimpia, the Pirelli's subsidiary which controlled Telecom Italia. I dare call all the related cross border transactions between Pekao and Pirelli in Poland and UniCredit and Pirelli in Italy, money laundering transactions.

Dear Shareholders, recently Alister Darling, the UK's Chancellor of the Exchequer, blamed shareholders of British banks for what he called the failure to exercise their responsibilities as owners. I hereby encourage shareholders of Unicredit to take an action as owners of this business. I urged many times the top Unicredit management to take the necessary steps in order to face the global financial situation. If they continue to ignore our modest and rational advises then, Ladies and Gentleman, you are the owners of Unicredit and I call upon you to introduce great changes into this bank before it is too late.
 

 

Thursday, 27.08.2009

Unicredit: possible tax evasion CLICK  Italian goverment will double check its potential, financial support for this bank.

Bosnia fines Unicredit CLICK  The strategy of interest rate hikes will not pay off, medium and long term. The interest rate hikes in banks are investigated in Poland as well.

 

Wednesday, 29.07.2009

Banks reopen global casino CLICK

EIB and Unicredit to distribute Euro 12 billion in CEE countries CLICK

 

Monday, 18.05.2009

Association for Transparent Markets was just established to protect the rights and interests of minority shareholders, entrepreneurs and other participants of public and financial markets. For more details, please, go to Association CLICK

 

Monday, 04.05.2009 - Michel Marbot statement at UniCredit Shareholders' meeting of April 29, 2009. 

 

The Poles say that “The most beautiful rose is the sclerosis”. Today, I was prepared to attend the shareholders’ meeting of a modern and European bank. I had expected our leader to ask for mercy, like the Japanese do, for the disastrous losses inflicted to the shareholders (reaching 90% of the market value of our Bank) or at least present to us a strategy, discuss the dividend policy and the remuneration of the management.

Instead I found myself at the Congress of the Communist Party of the

USSR not at the times of the great Stalin, but at that of the deliquescent Brezhnev.

 

Doctor Profumo, you constantly pretend that the crisis was provoked by the Lehman Brothers bankruptcy. Instead, you were perfectly aware, since August 2007, that we were going to crash against the wall.

This crisis is the logical consequence of the action of unscrupulous bankers, disposing without proper control of unlimited funds, that they lent regardless of the risk; because they knew, that in case of crash,  it would be up to the shareholders, the central banks and the taxpayers to pay for the losses. The more you lent or recycled bad debt, the more you received interests and revenues allowing you to present increasing and outstanding results justifying your astronomical bonuses (you paid to yourself, Doctor Profumo, over 8 millions Euro per year, which is not bad for a man who pretends he is leftist). This also inflated the stock prices and trapped small shareholders in your financial pyramids, provoking their ruin. You printed your own counterfeited money: I mean overvalued shares of your banks and derivatives and used both to distort competition and destroy small and medium businesses in the interest of some friends.  You have extended the Empire of the Evil with a perverse axiom: who is tricky and thinks short term shall win; who is honest and thinks long term shall lose and sometimes die.

 

What you present, Doctor Profumo, is already old fashioned.  I wonder if you have the willingness at all to reconstruct our Bank on modern grounds. However, as “la critica è facile e l’arte difficile”, I decided to tell our shareholders my vision of the Bank.

• First we must stop doing politics. The European bank that you pretend you have already built is only in your imagination. You remind me of Jean-Marie Messier, the dazzling Vivendi CEO who recognizes today that one of his biggest mistakes was to ignore his roots. The kings of France did not have European but Lombard bankers and were proud of this trade mark. While you suggest that you achieved the internationalization of our management, the reality on the ground is that you implemented a colonial system. Let’s take the case of Poland. The chairman of our affiliate is not a banker but a servile politician. Considering the fact that the Minister of Finance is our ex-counselor, what will happen if those people lose an election? You reply that JK Bielecki is a brave man; he is so brave that he cowardly sold his shares of our Bank in September 2008, when the crisis outburst. This captain left the sinking ship before the passengers did.
• We should refocus our action on Italy. What is the strength of Italy? A patrimonial heritage that is among the richest in the world (like the one that you, Doctor Profumo, just sold out to such extent that we do not have anymore the property of out seat, piazza Cordusio in Milan). Italy has also creative workers that cumulated savings over generations. My request is : do we have the right to bet this equity  in the East-European casino serving the interests of local mafias ?
• I propose, in a radical move, to reduce our activity in countries where our added value does not cover our risk, like Austria, Kazakhstan and Ukraine. You speak of outstanding growth rates in countries of the area but omit to say that you express them in local currencies which have sometimes been depreciated. This added to the stocks value collapse means that in certain countries we have lost 80% of our assets. Central and Eastern Europe is not a zone where we have to be everywhere or not to be. Each country should be assessed individually. I would focus on four countries to develop the Bank : Italy, Germany, Poland and Turkey.
• I propose a clear return to banking, which means to the financing of the real economy.
• Those who say the truth will gain the confidence of the market. This is why I would immediately conduct a stress-test based on our political and legal risks. In most cases a crisis is followed by a second shock, which is very harmful because it hurts a weakened body. For example, the 1978 Iranian revolution hit the world just after the 1973 crisis and provoked massive inflation. Today we see the impact of a flue on share prices. What will happen to us if the war in Afghanistan extends to Pakistan or Iran, considering our exposure in Central Asia and Eastern Europe?
• We must clarify the impact of the Project Chopin where you, Doctor Profumo, acting in a clear conflict of interests, being member of the Board of the Pirelli-Telecom Italia Group, you gave up to Pirelli an exclusivity on all our properties in Eastern Europe, using the same business model that provoked the spoliation of Telecom Italia.
• We must be clear about our activities in fiscal paradises, especially in Bermuda and Luxembourg.

 

We are now asked to renew our Board. We do not even have the illusion of a choice.

We can accept the right of major shareholders to nominate their representatives, whereas we would expect the CEO and the Chairman to be elected directly by the Shareholders. This rule should be implemented immediately.

Today, as you put it, your message is : “we take the same and start again, as if nothing had happened”.

My request is the following: is the “Banker of the Year 2007”

able to consider his responsibility for the present crisis and build our Bank on new foundations? Can we expect this from a man who is a pure product of the financial technocracy?

Let me state clearly that I have no disdain for the great professionalism of Doctor Profumo. But I invite him to meditate these words by Rabelais: “science without conscience is ruin of the soul”.

 

I dare to propose an alternative. Obviously my candidacy is today a testimony. However I set an appointment with all of you for the future, because the changes in the world seem to accelerate.

I am French, I was born in Italy and my wife is Polish.

I’m the god-child of one of the greatest geniuses in post-war Italy; I wish to name Luigi Veronelli, a man who praised freedom.

I am Catholic. I have 7 children, speak 7 languages, lived in 7 cities: Milan, Rome, Paris, London, Mannheim, Athens, Orenburg (in Russia, at the Kazakh border) and Warsaw.

I have an MBA from INSEAD (Fontainebleau) and graduated, in Paris, in Political-Science, History and Law.

My banking experience grew on field in France, Greece, Italy and Poland.

More than anything I am an entrepreneur and performed the first privatization in post-communist

Poland. I am independent and know the people.

Today, I propose to you to rebuild together UniCredit-O   I-TA-LIA-NO.

 

Monday, 04.05.2009

Unicredit shareholders’ meeting is over – no changes to the bank’s strategy and management were even considered. However, the financial stability of the Unicredit Group is questionable. Unicredit's CEO, Mr. Alessandro Profumo, had no good answers to the Unicredit liquidity problems. Moreover, he was unable to justify numbers which came out as result of a simple manipulation. €3.2 billion of profits for the bank were achieved by various restatements and creative accounting. If not, the Bank itself reconizes that the loss before taxes would amount to € 760 million (page 26, 2008’ Annual Report, Unicredit Banca).

Mr. Profumo, admitted that, neither Pekao nor Bank of Austria made any provisions or impairments to its financial assets to reflect the risk of running two banks in Ukraine, not to mention Russia, Kazakhstan, Latvia or Austria. KPMG has warned the investors about the underlying risks in its note to the 2008’ FS of Bank Pekao SA but although KPMG is also the auditor of UniCredit, we did not find such warnings in the financial report of PEKAO's parent company, UniCredit.

Bank of Austria only substantial provision (€ 1.5 billion) reflects the loss on investments in the Madoff’s funds. We highlighted during the meeting IMF warnings that the banking sector in Austria is overexposed to CEE countries. Mr. Profumo is immune to such remarks and his simple answer was: “IMF will help Ukraine financially.” Instead, the corporate site of Unicredit Ukraine shows that the latter has specialized in new credit cards, mortgage and consumer loans – which are by nature explosive in these times of financial crisis. Surprisingly, this site does not show the 2008 annual report of that Bank. Summoned by Unicredit, Bank of Austria posted record high profits – something which goes against common sense and is contrary to the attitude of most Austrian competitors who do not deny heavy losses.

All major banks in the Unicredit Group reclassify selected financial instruments to the “held to maturity” category. Such reclassification allows to book those assets at their historical purchase value - before the crisis - instead of today's depressed mark to market value. The Group's record in such manipulations was hit by HVB, the German subsidiary. It reclassified €13.7 billion worth of financial assets as "held to maturity". If HVB had chosen not to do it, its loss of 0.585 billion would have been increased by €1.856 billions. Increadibly, in addition to that, HVB reports a €60 billion increase (on balance sheet) of its interest rate derivatives which are another sign of creative accounting. This worries us and we hope that the markets shall get some credible explaination.

Mr Profumo was totally hermetic when confronted with our questions concerning Unicredit operations in fiscal paradises especially in Luxemburg, Bermuda and the Cayman Islands. Mr. Profumo stated, that the scheme in Luxemburg related to a speculation on the Turkish lira was concluded without his knowledge or involvement and that he had nothing to say on this subject. However, Mr. Profumo did not deny the fact that some of the operating expenses of the Group were paid through fiscal paradises.

Mr. Profumo compared his bank results to the results of his European competitors and concluded that Unicredit financial position and prospects looked strong. He pointed out to the UBS results. In our opinion, one cannot compare the results and prospects of those two banks. Firstly, there are substantial differences in accounting policies to put it diplomatically. Secondly, as early as in March and April of 2008, UBS increased its capital/liquidity, then in May of 2008 it sold a bulk of toxic assets worth CHF30 billions and by year-end it concluded divestment for CHF38 billion of illiquid assets to a fund owned by Central Bank. Meantime, Mr. Profumo had made numerous public statements about Unicredit adequate capital position - till November 2008 - and took no preemptive steps  to prepare for financial collapse.

In our opinion, the Unicredit Group financial situation is dramatic, today. The cash position of  Unicredit Bank was depleted by €4 billions throughout 2008, to reach the mere amount of 33 millions at the year end. The positive inflows came from other banks of the Unicredit Group in forms of loans and deposits (€35 billions), repo transactions (€8 billions), and central banks (€19 billions). The inflows were directed primarily (€29 billions) to the Italian Corporate Banking and to the mortgage operations – Unicredit Banca per la Casa. The organizational restructuring of the Group has not improved its financial position -  it only prepared it for controlled insolvency. 

Stress Test CLICK 
IMF report CLICK

 

Monday, 20.04.2009 

We are going to participate in the upcoming shareholders' meetings of Unicredit and Pekao. Since 2007, we have been in a court battle with the Bank Pekao SA over shareholders' resolutions related to the merger with BPH Bank, '2006 and '2007 financial statements, dividend payouts and approvals for the supervisory and management boards' members. The key allegations relate to so called "Project Chopin". The contractual agreements between Unicredit, Pirelli and Pekao on the other side, that have been hidden from the markets right until this very moment. The contracts granted to Pirelli a right of first refusal and exclusivity over almost 10% of Pekao assets, bank's real estate and real estate of the bank's clients. In turn, at the same time, Pirelli, in yet another asymetric transaction, paid Unicredit € 585 millions for the Telecom Italia shares, worthless at that time.

 

In 2008, Unicredit voted with its shares for a dividend payout exceeding net profits of Pekao for 2007. Recently, Financial Supervision Commitee (KNF) has stated in the press release that the excessive payout was against the law.

 

Comments to the Pekao financial statements (FS) for 2008

1. Cash position of the bank was depleted by PLN 5 billions.
2.  Off the balance derivatives at nominal value exceed by the factor 2 to 1 the total assets of the bank.
3. Bank's auditor indicated in its statement that no provisions were created to cover loss of value of the Pekao's Ukrainian, 100% owned subsidary - Unicredit Ukraine (PLN 4 billions at the book value).
4. Exposure of Bank Pekao to the other companies from the Unicredit Group excced PLN 7 billions.
5. PLN 3,5 billion worth of financial instruments were reclassified due to the financial crisis.
6. The valuation of financial assets was performed based on historical averages with no intention to reflect financial crisis impact according to our analysis.
7. There is no mentioning in the FS about Pekao uncover position and exposure to SF morgages - PLN 7 billion equivalent.
8. No sector risk analysis. The exposure to Pirelli real estate projects (financed through SPV) was falsified in the FS.
9. No mentioning in the FS about KNF verdict on '2007 excessive and unlawful dividend payout.
10. No mentioning in the FS about contracts with Pirelli and Unicredit and related liabilities.

Conclusion: Pekao FS reflect no more but virtual and relax accouting practices of the Unicredit Group. We will examine Unicredit and Pekao financial situation very closely during the meetings.

 

 

Tuesday, 14.04.2009

Unicredit says faces $360 mln claim in New Mexico CLICK  In Poland, one can claim damages directly from Unicredit as well. Unicredit entered together with Pirelli into a contract - so called "Chopin Agreement" and forced in a ultimative way its dauther company, Pekao into unfair shareholders' agreement with Pirelli.

 

 

Monday, 30.03.2009 

Unicredit CEO, Mr. Alessandro Profumo was called as a witness to the local court in Gdansk, Poland. The court case is related to a conflict between the Polish pasta producer, Malma and Bank Pekao SA, Unicredit's subsidiary. Mr. Alessandro Profumo was , as a board member of Barilla, in a clear conflict of interest when Pekao consolidated all the banks' debts of Malma and called for the loans. Moreover, Mr. Profumo was, as a board member of the Pirelli Group in yet another clear conflict of interest when Unicredit forced its Polish branch Pekao to sign an unfair contract with Pirelli (the so called "Project Chopin").

 

Monday, 16.03.2009

We have studied the Pekao SA financial statements presented by the bank last Thursday. We come to a conclusion that difference between presented numbers and true financial picture of the Pekao would account for at least Euro 4 billions including loss value of Pekao's Ukrainian subsidiary, shift in accounting for derivatives and financial loss caused by implementation of "Project Chopin". The difference stands for the profits of Euro 4 billions for the Group, expected by the Unicredit's CEO. And we have studied just one of the Unicredit's subsidiaries.

 

Wednesday, 18.02.2009

1. Eastern Europe shakes banks CLICK
2. Dear authors, The reasoning behind your article is in part wrong. We would like to direct your attention toward the unfair practices of Unicredit and JP Morgan in the CEE countries and Poland in particular. Beside, so called "Project Chopin", well documented at unicreditshareholders.com , Poland faces a crisis caused by high currency exposure to the US dollar, Euro and Swiss Frank. For example, Unicredit has sold directly and through its Polish subsidary asymetric (up to 90% of the risk with the clients) currency and interest derivatives. Unicredit used the same tricks as in Italy, where it got punished in the Italian courts. Unfortunately, both in Poland and Italy the key role on the  currency markets was played by the US banks: JP Morgan and Merrill Lynch. Moreover, their recommendations and reports go against the positions they take in the financial markets. We believe the truthfull title for your article would be: "Banks shake Central and Eastern Europe"
3. Scandalo Derivati Report RAI 3 CLICK

Monday, 2.03.2009

1. S&P 500 set new record low on Friday. What would bring the coming week? ANOTHER WEEK OF UNCERTAINTY.The coming week was likely to bring a further barrage of bad news. Two key reports on U.S. employment and manufacturing were both expected to show a significant deterioration.Analysts believe the U.S. economy lost a staggering 648,000 jobs in February alone. Such a reading would be the worst since World War Two, and would push the total number of jobs eliminated during this recession above 4 million.Another source of concern over the next few days is the situation of beleaguered insurer AIG, which received a controversial bailout from the Federal Reserve last year.The U.S. government, AIG and credit rating agencies, including Moody's, S&P and A.M. Best, are in discussions, according to a source familiar with the matter, as the firm prepares to post a quarterly loss of roughly $60 billion. That shortfall equates to about $460,000 a minute, and would be the largest in corporate history.AIG is considered too vital a pillar to the global financial system because of its central role in the market for credit default swaps, securities that have been blamed for accelerating the pace of credit losses in global markets.A key focus of the talks is to avoid a ratings downgrade, which could have serious ramifications on the insurer's liquidity and hurt its businesses, with possible ripple effects throughout an already fragile financial sector. PROTECTIONIST RUMBLINGS. Amid the turmoil, governments around the world scrambled in an effort to shield their economies from the slump. Leaders of the 10-member ASEAN (South East Asian Nations), meeting in Thailand, vowed to work with the G20 developed and developing nations on reforming global financial institutions.Yet critics argue while ASEAN leaders have argued against protectionism in world trade, they have defended their own buy-local campaigns saying they are consistent with trade rules.In the European Union, a commitment to open markets and help for poorer member states also risked losing ground to pressure on governments to protect their national industries.With President Barack Obama pumping up the U.S. budget for more spending to halt the downturn, and facing a record $1.75 billion deficit to do so, leaders such as France's Nicolas Sarkozy have said Europe should be ready to follow suit.'If the United States defends its industry ... maybe in Europe we can do the same,' he said this week, referring to certain 'buy America' provisions in the president's recently passed economic stimulus bill.(Reporting by Jonathan Stempel, Paritosh Bansal, Christina Fincher, Writing By Pedro Nicolaci da Costa; Editing by Eric Walsh) Keywords: FINANCIAL/(pedro.dacosta@reuters.com; +1 646 223-6310; Reuters Messaging: pedro.dacosta.reuters.com@reuters.net)
2. Unicredit capital adequacy still far below required levels - Italian and Austrian goverments help not enough.