Safeguards mechanisms and obligations are planned

December 2008 - June 2009: six months have elapsed between the explosion of the Madoff scandal and the European elections. Six months between two seemingly unrelated events and yet concerning a same reality. Six months, in effect, that the capacity of Governments, financial markets and the bodies of the European Union authorities to uphold the common law is harmed. Six months that this Europe, which will ensure that it protects its citizens, is, on this record, unable to enforce its texts.

There are, in fact, two scandals Madoff. The first one is, apparent fraud committed by the businessman in New York. The second, far more cunning, is a scandal strictly European.

It is the one live these savers who have chosen to invest in products, mutual funds or mutual funds classical, of European status, sold by financial institutions of primary, authorized by the countries of the Union since receiving the guarantees defined by the European directives. Guarantees for which the clients, i.e. the savers, have paid.

We do not confuse! This is Bernard Madoff who defrauded. But the text and the spirit of the European directives are clear: banks, who did invest in Madoff customers via these products of European status, which were therefore touted or sold Community legislation guarantees, are obviously held by the commitments and guarantees of these mutual funds and mutual funds of European status.

Among these commitments, one of the paramount is the depositary. It is to guarantee to the customer, not not the value, but the existence of securities, shares or debentures or who are enrolled in its liquidity account. Any investor knows that his bank does not guarantee him the value of the shares or bonds in which it invests. The Bank does not guarantee the level of the course. But, as long as depositary, it guarantees the existence, the guard, the reality, the availability of titles, shares or bonds, or cash. This repository is at the heart of the banking profession. It is a key to the life of the business component; It is this guarantee which justifies the confidence of the investors. It is the existence of a such depositary which is that we can rely on our bank statement and that we accept payments by bank transfer.

However, for six months, two banks of world-renowned, HSBC and UBS, having sold a common fund, for the first Thema, registered Ireland, and the second a sicav, Luxalpha, listed in the Luxembourg, both governed by the same directive European, do not meet.

They chose to ignore these clients that they choyaient a few days prior to the scandal and continued their opposition an end of estoppel, forcing them to the way judicial, necessarily long, costly and detrimental to the individual. Then as it turned out that, without indicated in the documentation given to the authorities of guardianship or to clients, UBS and HSBC were both fully delegated the role of custodian to the Group of Bernard Madoff (BMIS) itself, while the prospectus of the Fund did not banks to delegate their role as depositary.

Thus the specific customer, the citizen of the Union finds itself a strange reality. It is because of the deficiencies and the lightness of these banks that Bernard Madoff was able to announce fictional operations and to eliminate the funds. This is because the custodian has not fulfilled its role of monitoring, backup, that the fraud could take place.

The CSSF, supervisory authority in the Luxembourg market, this is three months, after investigation and hearing of those responsible for UBS, identified breaches of the Bank concerning "the necessary infrastructure and the human and technical resources to accomplish all of the tasks of the depositary function" and, accordingly, asked UBS "to ensure damage in connection with breaches here - before described". Without result.

The texts exist. Safeguards, mechanisms and obligations are planned. But the national guardianship authorities remain powerless. Sad observation that casts doubt on the whole of the European edifice.

European customers have yet invested in coordinated products that allow to the benefit of the community guarantees, the guarantees assumed to be uniform throughout the European area. They appealed to large houses, prestigious institutions that they expect to meet their commitments.

Six months! Six months beyond the credibility of banks, damaged the image of the European Union. As well the European directives and the credit of the Europe of the savings that are so despised.

The solution may be simple. The principle of the Union is that a company authorized to exercise by a member country can work in all Member States. The symmetric should therefore be ensured and the withdrawal of approval issued by a State should be applied in all States.

Because the situation is now unacceptable and it is the client who bears the consequences. These failures throw doubt on all of the banks and a discredit to the European edifice. Situation unworthy for customers, unfair for banks virtuous and catastrophic for the European banking and financial credit. It is but this scandal that accept all those who now claim that the Union works and protects its citizens.