Grand masters of opacity

For a major Czech bank, Investicni a Postovni Banka was deeply untransparent. Bank analysts, auditors and central bankers tried in vain to map the labyrinth controlled by vice-chairman Libor Prochazka. They didn’t much like the bank or its emphatically non-strategic partner Nomura. So, when catastrophe hit IPB in June, the government stepped in heavily and maybe did the wrong thing, for the right reason – or vice versa. Was this the best way for an EU candidate to reform its financial sector? David Shirreff reports

David Shirreff

Sunday June 18 seemed a normal Prague afternoon. Tourists streamed through the castle, down the hill, across Charles Bridge into the Old Town Square. At Stvanice tennis club, Jack Stack, American chairman of local bank Ceska Sporitelna was playing doubles with a journalist, a lawyer and an investment banker. Thomas Münkel, chief of Allianz insurance’s local subsidiary, was in the garden with his family, expecting a busy day on Monday. Randall Dillard, Nomura’s chief regional investment banker, downed a few jars of Pilsner Urquell, whose famous brewery he’d successfully sold to the South Africans last year.

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