Scandal
The bank's financial condition was seriously damaged during the 1998 financial crisis due to a requirement by the Russian Central Bank that all commercial banks keep an economically untenable proportion of their reserve requirements in Russian treasury bills known as GKO, which subsequently collapsed, causing a default which led to the crisis and Bank Menatep's bankruptcy. The Central Bank revoked Menatep's licence in May 1999. However, according to Ernest Backes, former #3 of Clearstream, a clearing-house which has been qualified as a "bank of banks", Menatep maintained an unpublished secret account at Clearstream until at least 2000. The bankruptcy was finalized by February 2001. In an unprecedented move, the core shareholders of the bank, the financial holding Group Menatep, of which Khodorkovsky was a principal, made a decision to pay their own money to all 15,000 Bank Menatep small depositors whose savings had been wiped out by the collapse. A new Bank Menatep Saint Petersburg was created from the Saint Petersburg division of Bank Menatep. It accumulated the assets but not the liabilities of the original bank. In 2004 the bank was bought by the management and renamed to Trust National Bank.
Read more about this topic: Bank Menatep
Famous quotes containing the word scandal:
“Gossip isn’t scandal and it’s not merely malicious. It’s chatter about the human race by lovers of the same. Gossip is the tool of the poet, the shop-talk of the scientist, and the consolation of the housewife, wit, tycoon and intellectual. It begins in the nursery and ends when speech is past.”
—Phyllis McGinley (1905–1978)
“In London, love and scandal are considered the best sweeteners of tea.”
—John Osborne (1929–1994)
“The day the world ends, no one will be there, just as no one was there when it began. This is a scandal. Such a scandal for the human race that it is indeed capable collectively, out of spite, of hastening the end of the world by all means just so it can enjoy the show.”
—Jean Baudrillard (b. 1929)