The AREB profits from 250 million euros in savings Part 2

Three years since the intervention to the BPA, and not the slightest attempt has been made to give back the funds to the rightful owners

On March 10 2015, when BPA’s intervention happened, most of BPA’s shares were in the hands of some “upstart entrepreneurs”. The head of state, Antoni Martí, assured back then that the entity “currently has enough solvency and liquidity to withstand”, and that the problem was focused exclusively on alleged malpractice from one sector of the bank. In other words, the bank was being intervened by an assumption in a note, which qualified the BPA as a “financial entity of first-rate concern in matters of money laundering”. Arguments and requests for proof and information, made by control and regulating institutions, were disregarded.

In spite of Andorra being a tax haven, this malicious behaviour fended off foreign capitals and generated mistrust, giving the whole Andorran financial system a bad reputation. The same goes for institutions, markets and clients, affecting the normal functioning of the economy within the Principality. Moreover, other Andorran banks were also terrified, since they were all vulnerable to malpractice accusations.

Bearing in mind the objectives and principles that justify the creation of the AREB, the main objective has not been met, which is to protect the depositors, whose funds are guaranteed by the deposit guarantee system. An effective resolution scheme should minimize the possibility of contributors being the ones to assume the costs incurred by an unsustainable institution. The new competences established in the Resolution Law, must allow the authorities to maintain a free access to deposits and payment operations, as well as sell viable parts of an entity, when applicable, and assign losses in a fair and predictable manner. That means, the shareholders should be the first to endure the losses, but that has not been the case.

The BPA case is a concern for the citizens of a country that has yet to fully leave behind its medieval structures, and where the legal safety has been a bad reference in the business world. One’s interests and properties could be affected overnight, go to waste, all because of a political system that even though keeps the basic ways of a democracy, stays outside the scope of what is lawful in the developed world, and acts in an arrogant manner.

This unpleasant story is the combination of Andorra’s incompetent and compulsive government, an arrogant EU government agency, and the unmeasurable corruption of Spanish police officers. The situation demands to urgently apply strong measures, and at the same time flexible enough to avoid the risk of one entity’s crisis having an impact on all other entities and the whole Andorran economy.