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Santo Domingo. - Although the hundreds of billions used to ease the U.S. financial crisis makes it without a doubt the greatest financial rescue in history, other bank failures, such as Dominican Republic’s in 2003, were relatively higher as to the local Gross Domestic Product (GDP) and fiscal cost.
A recent International Monetary Fund (IMF) study places the country’s 2003 bank frauds among the major bank crises registered from 1970 to 2007.
Based on the IMF study “Systemic Banking Crises,” Merril Lynch analysts concluded this week that, on average, the worst crisis have represented 13.3 percent of their countries’ GDP.
According to Merril Lynch analysts the average banking rescue, as far as fiscal costs, has been 28 percent of the GDP.
In the Dominican case, the study notes that just the 2.2 billion dollars originally attributed to the Baninter bank fraud then represented 15.5 percent of the GDP.
The report stresses that despite that the Central Bank only seized Baninter and assumed its bad credit portfolio, the US$1 billion Bancredito and Mercantil bank frauds further stoked the crisis, which together cost Dominican taxpayers about US$3.2 billion.
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So, the study wasn't done by competent people. The IMF, master of all kinds of frauds, released the "study" as if to say "The Dominicans are lot more corrupt than IMF and US thieves are."
Well, this is not true.
The current US financial crisis is not just a bank fraud story, but a sectoral or "systemic" that is truly international, rather essentially domestic.
IMF and Merrrill Lynch pushed domestic and foreign investors, including central banks of many countries, into US dollar-denominated "assets" that contained design flaws -- mortgage-backed bonds often based on mortgages with pedator adjustable increases in the monthly mortgage payments of between 300% to 500% -- that caused the bonds and underlying mortagages to blow up into worthlessness.
The IMF's stake in this securities fraud called the "US financial crisis" is that this crisis wipes out all or a large portions of the currency reserves of many countries, making them even for dependent than they are on the IMF for loans. Now, the IMF can encroach on the sovereignty of these extremely dependent countries as never before, completely regulating their economies, societies, and politics.
IMF "advisors' asked central banks "Why are your currency reserves in these US treasuries that pay 3% or 4 % or these bonds based non-predatory mortgages with increases in monthly payments of the homeowners of only 25% to 150%, bonds paying only 4% to 6% return on capital."
"You should put your reserves in these bonds based predatory mortgages with 300% to 500% increases in monthly payments and get a 6% up to 10% return."
"You, down there, roll over ... not that way, the other way."