Executive chairman of Spain’s troubled Bankia resigns
MADRID — Rodrigo Rato, executive chairman of Bankia, Spain’s largest real estate lender, resigned Monday before an anticipated government recapitalization of the company, which is sitting on 32 billion euros, or $42 billion, in troubled assets.
Rato, a former finance minister and past managing director of the International Monetary Fund, is the most prominent Spanish banker to quit since the start of the eurozone’s sovereign debt crisis, which has raised concerns not only about the solvency of Spain’s banks but of its economy as a whole.
While the government and the central bank have been debating in recent days how to clean up the balance sheets of the most troubled banks, Spain’s prime minister, Mariano Rajoy, confirmed Monday that a rescue plan could involve public money. Earlier, he had pledged not to make taxpayers bear the cost of saving the banks.
Bankia is now expected to receive 7 billion to 10 billion euros, or $9 billion to $13 billion, of additional state money in the form of convertible bonds, according to reports Monday in the media in Spain.
—Raphael Minder, The New York Times
Buffett’s politics cast shadow over Berkshire meeting
OMAHA, Nev. — “When Charlie and I took this job, we did not agree to put our citizenship in a blind trust.”
That’s what Warren Buffett said here over the weekend at Berkshire Hathaway’s annual meeting when confronted by a shareholder complaining that Buffett had become a public advocate for President Barack Obama and the so-called “Buffett Rule,” which seeks to raise the tax rate on wealthiest Americans.
Buffett’s longtime business partner, Charlie Munger, vice chairman of Berkshire, quickly quipped that his partner’s position on taxes “has reduced my popularity around my country club.”
It also appeared to reduce Buffett’s popularity among some shareholders. Buffett’s comments came after the investor had submitted a question, which echoed the thoughts of many others: “My 84-year-old father won’t invest in Berkshire because of your stance on taxes.” Buffett replied with a zinger: “Sounds like your father should buy stock in Fox.”
—Andrew Ross Sorkin, The New York Times
US and Europe warn Iran
on nuclear talks
The United States on Monday injected a note of caution into the mood of optimism surrounding recently revived talks on Iran’s contentious uranium enrichment program, calling on the Iranians to take “urgent, practical steps” to prove their sincerity in complying with obligations on the nonproliferation of nuclear weapons. The European Union was more direct, asking Iran to suspend the enrichment, a step that Iran has said it will never take.
The U.S. and European statements, made at an international nonproliferation conference in Vienna, may have reflected diplomatic posturing two weeks before the next planned round of negotiations with Iran on the uranium enrichment dispute, to be convened in Baghdad. But the statements also seemed to suggest the atmosphere of good will in seeking to resolve the dispute diplomatically may have begun to fade.
Positive statements on all sides after the first round of resumed negotiations in Istanbul last month, the first such negotiations in more than a year, had helped to ease rising tensions and had diminished speculative talk of a possible military attack on Iran’s uranium enrichment facilities by Israel, which regards Iran as its most dangerous adversary.
—Rick Gladstone, The New York Times