That money went directly into the pockets and executive bonuses of Goldman Sachs, Societe Generale and Deutsche Bank.
FORBES: Fixing Too Big To Fail Using Balance Sheet Sequestration
That concern was evident this week in a massive selloff in shares of French Bank Societe Generale.
French bank Societe Generale announced that its recent trading scandal aggravated problems stemming from the credit crisis, leading to a fourth-quarter loss.
It was signed by some of France's most high-profile chief executives, including Christophe de Margerie of oil firm Total, Frederic Oudea of bank Societe Generale, and Air France's Jean-Cyril Spinetta.
The temporary European ban, announced last night, comes in the wake of dramatic falls in the share prices of European banks, especially those of Italy and France - where on Wednesday the shares in one giant bank, Societe Generale, were more than a fifth lower at one stage.
Corporate bank borrowers such as Credit Agricole, BNP Paribas and Societe Generale were given more time, after a lifeline was thrown to them by the European Central Bank when it flushed liquidity into the system on Dec. 21.
The banks, Goldman Sachs and Morgan Stanley in the U.S., and Credit Suisse, Deutsche Bank, Barclays PLC, Societe Generale and BNP Paribas in Europe, are expected to be affected by one or two ratings notches, if they are downgraded.
But you also have banks like the National Bank of Greece, Allied Irish Bank, La Caixa Barcelona and Societe Generale.
Bill auctions will be carried out through the 47 international banks that make up the EFSF Market Group, which is primarily composed of U.S. ( Goldman Sachs Group, JPMorgan, Bank of America, etc.) and European ( Deutsche Bank, BNP Paribas, Societe Generale, etc.) institutions.
FORBES: EFSF To Sell Short-Term Paper As Part Of Bailout Funding
In separate news, a China state bank has suspended FX swaps with UBS, Societe Generale, Credit Agricole, and BNP Paribas after those banks had reportedly reached their credit limits with the BoC.
FORBES: Stocks Perk Up On 'Operation Twist' Talk, Take Italy In Stride
French banks Credit Agricole and Societe Generale both closed up 8%, while in Germany, Deutsche Bank rose 7% and Commerzbank, 5%.
But Brian Hilliard, chief UK economist at Societe Generale, said that the government's new instructions for the Bank could potentially damage its reputation.
Societe Generale's chairman and chief executive chairman Frederic Oudea said the bank's cost cutting efforts would lead to a total of about 1.5bn euros in savings during the 2012-15 period.
French banks like Societe Generale, BNP Paribas, and Credit Agricole surged on the global central bank liquidity bailout presented last week.
The second group included Goldman Sachs, Societe Generale, Barclays, Credit Agricole, BNP Paribas, Credit Suisse, Deutsche Bank and UBS. Moody's said these firms had varying risk factors, from high dependence on capital markets operations to limited liquidity and exposure to Europe.
Barclays has fallen about 1% over the past week, UBS and HSBC have each dropped more than 1.5% while Deutsche Bank has slid more than 3% and two French banks, BNP Paribas and Societe Generale, have gotten crushed, declining by more than 5% and 6% respectively.
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