March 8, 2021

The National Court denies that Christine Lagarde testify in the Bankia case in August



The National Court has set this July as the limit for the managing director of the International Monetary Fund (IMF), Christine Lagarde, declare as a witness in the trial investigating the existence of irregularities in the IPO of Bankia in July from 2011.

This has been transferred by the president of the fourth section of the Criminal Chamber of the Audiencia Nacional, Ángela Murillo, to Andrés Herzog, a lawyer who defends the Inter-Union Confederation of Credit (CIC), accusation that has maintained from the outset that the Lagarde's statement is essential to clarify the role of the international body in the BFA-Bankia crisis.

Although Lagarde had been summoned to testify as a witness on May 8 by videoconference, from the IMF they accepted their "immunity policy" and reported that it was "complicated" to conduct a videoconference, the usual way of the questionnaire.

In this way, the CIC prepared a questionnaire consisting of six questions and that was received by Lagarde on June 25, although last week he said that he had received it in "bad condition", so requested that the deadline be extended to respond until next August 16.

The Spanish courts close their doors in the month of August, so extending the deadline for delivery of responses, which must also be translated and approved by the Ministry of Economy and Business before joining the process, meant having to wait for the less until September.

That is why, after almost eight months since the trial began, Murillo is not willing to continue extending the process, so she has decided to reject Lagarde's request and has expressed her willingness to end this July with the phase expert, which began on June 17.

In this way, in the event that Lagarde's response does not arrive in the next four weeks, the president of the Bankia tribunal will not admit her testimony. The CIC will have to renounce it after several months insisting that it be tried until the last moment.

Questions about the bank's situation

The first of the issue that should clarify the director of the IMF – who will assume the presidency of the European Central Bank (ECB) on November 1 to replace Mario Draghi-, is the opinion that the international body had on the situation of the banking group in the first half of 2012 and its decision to go public, materialized on July 20, 2011.

The Confederation also justifies the testimony of Lagarde for the Evaluation Program of the Spanish Financial System (FSAP, for its acronym in English) developed by the IMF between February and April 2012. The IMF arrived from 'mission' to Spain on February 1 , with a team of 16 people headed by Ceyla Pazarbasioglu.

The head of the mission met with the then president of Bankia Rodrigo Rato and the former Minister of Economy and Enterprise Luis De Guindos (now the ECB's vice president) on February 15 and April 25, the progress of his report was made public , in which, in reference to Bankia, it was advised to take "quick and decisive" measures to strengthen its balance sheets.

In this way, Lagarde is also asked for explanations about how early reviews or financial audits of the FSAP are prepared and if in the corresponding to Spain in 2012 the process for the constitution of the Institutional Protection System (SIP) was also analyzed. BFA-Bankia and the IPO of the entity, indicating from when and why there was concern about the situation of the entity.

Another question refers to the content and conclusions obtained from the meetings and contacts held by the representatives of the IMF with Rato and De Guindos in February 2012, including the assessment made by the IMF on the intervention of the Bank of Valencia and the performance of BFA-Bankia in relation to said circumstance.

Thus, in addition to the aforementioned contacts, the CIC asks Lagarde to say whether the mission in charge of evaluating the FSAP met with the heads of the Bank of Spain and other supervisory authorities or entities, explaining the result and the main content of the encounters

Regarding the "important capital needs" that were estimated and the "necessary recourse to public financing" to preserve the financial stability indicated in the preliminary conclusions of the FSAP published on April 25, the questionnaire asks Lagarde to specify what public aid figures considered necessary to solve the crisis of BFA-Bankia and if they were based on reports or analysis of some kind, as well as what solutions the IMF required to "avoid contagion to other entities."

(tagsToTranslate) Audience (t) National (t) Lagarde (t) FMI (t) Bankia



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