Banco Comercial Del Uruguay
In 1990, Chemical Overseas Holdings, Inc. (a subsidiary of JPMorgan Chase) acquired with Dresdner Bank Latinamerika and Credit Suisse First Boston the Banco Comercial del Uruguay (BC), one of that country's oldest and largest national banks. As the years progressed, Uruguay developed as a large offshore banking center for Argentina and Brazil, largely as a result of its lax banking laws and the predominant view among Argentines that Uruguay was a stable place for their savings.
As a result of the banking crisis, some $800 million USD of assets were missing from the BC alone. In the end, five financial institutions failed and hundreds of thousands in Uruguay, Argentina and Brazil were left in dire economic conditions after seeing their bank accounts literally disappear.
In January 2005, the Paris-based International Chamber of Commerce ruled that the Uruguayan government would have to pay USD 120 million to JPMorgan Chase & Co., Dresdner Bank AG, and Credit Suisse First Boston for failing to maintain the solvency of the BCU.
The crisis underscores the three banks’ difficulty in managing risk in developing countries and dealing with local partners during a time of financial crisis. As a result, a class of BC's former depositors is suing the three international banks and the individual directors they appointed to BC's board to recover the losses suffered as a result of the bank's collapse.
Read more about this topic: 2002 Uruguay Banking Crisis