Libyan war a boon to banks that wasted Gaddafi’s money
The civil war in Libya and the West’s declaration of Muammar Gaddafi an illegitimate leader is good news for financial institutions that borrowed money from the Libyan Investment Authority (LIA) and invested it with disastrous results.
Earlier several media, including The Financial Times and the Wall Street Journal, reported on how poorly the institutions had dealt with the Libyan assets.Goldman Sachs was reportedly entrusted with $1.3 billion and managed to turn it into $25.1 million, or a mere two per cent of the original sum, through poor management. Settlement of the conflict was never finalized.Societe Generale did a little better, wasting just 72 per cent of the LIA’s investment. The French bank convinced the LIA to buy its own shares for some $1 billion a month after the actions of the rogue trader Jerome Kerviel led to a 5 billion-euro loss. After the scandal, SocGen’s shares plunged.After the civil war erupted in Libya, all the national assets in foreign banks were frozen. Washington said the money will eventually go to the rebels.According to RT’s financial expert Max Keiser, what happened to Muammar Gaddafi’s funds is just another example of banking terrorism. ”The banks are financial terrorists,” he said. “Everything that they touch they turn to some kind of act of larceny or accounting fraud and this is how they pay themselves US$140 billion in bonuses at the end of the year in an economy that is collapsing, as jobs are disappearing.”
Berny Dohrmann, an investment banker and economist with decades of experience dealing with countries facing economic meltdown, told RT that, despite Libya being a dictatorship, it was primarily the Libyan people who suffered the most from the losses, and not just the Gaddafi family.“The Gaddafi regime and family has been truly investing back in education and infrastructure, and building up the country in Libya to an extent that you haven’t seen a parallel or an equal across the Gulf area in equal measure,” Dohrmann explained. “There’s been certainly some self-enrichment going on in the normal execution of this kind of government. But you have also one of the most benevolent heads of state trying to help the people and build up his country – and he has built up the country.”
