Toxic loans: “The officials were so confident”
Translated in English:
Former bank executive, Emmanuel Fruchard is co-host of the siteemprunttoxique.info . He focused on products it deems most risky (those who bet on the currency ), calculating the real additional cost to the community of which he managed to obtain details of the contracts. A feat which today serves as an example to all activists pro-transparency and anti-toxic loans. Councillor PS (opposition) to Saint-Germain-en-Laye, near Paris , he tries to warn his fellow citizens about the risks taken by the union garbage in his city.
How you are you interested in toxic loans in your city?
Emmanuel Fruchard: When I was at Credit Lyonnais, I was Structurer swap[designer of a type of financial product designed to manage investment risk] . It is not the instrument that is bad, but the use which has been made.
In preparing the municipal 2008 with PS, it was distributed annual reports of unions and I have had waste. I saw that the union ( Sidru, Syndicat intercommunal for the destruction of MSW ) was treated swap formula to reduce the cost of its debt. It made me jump , because I had not seen it in dynamic asset management, that is to say, speculation leveraged [a multiplier effect that magnifies gains or losses] .
It took months to get contracts. The mayor tried we walk , but we ended up having, full, in summer 2007. It was, in September, a mailing alerting the serious risk that was taken (there was one in three chance that the Sidru pays a higher rate at 30%) to fifteen mayors union by proposing future they explain : no has suggested that we go to see .
Why did they choose elected to contract a structured debt?
The cost of the incinerator established in the late 1990s was very high and it is oversized relative to the number of inhabitants. The accounts were still unbalanced so it was, according to Emmanuel Lamy [Mayor UMP since 1999], or play [agreeto a speculative bet on a financial product], or increase the tax on household waste. Several mayors were quite against the latter.
Then the “why contracts” is the “soft” information: a citizen can get contracts, but not the emails exchanged between business leaders and the community.
They were so confident that some contractual maturity dates falling stack municipal year . And to a certain generation, they did not see the franc Swissabove the dollar [until 2010, it was less one dollar for one Swiss franc, it now takes more than a dollar to get a Swiss franc].