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.
But there was one thing probably foremost in these men's minds, in fact in the minds of the entire Czech Financial community.
On Friday, special police with sub-machine guns had burst into the country's third biggest bank, Investicni a Postovni banka (IPB) and installed a forced administrator.
The administrator assumed all the powers of both bank boards and its shareholders. That put an end to Five days of panic during which citizens had besieged its branches and withdrawn deposits totalling Kr17 billion ($430 million). Interbank lines were cut. The bank was dumping its equity portfolio to raise cash.