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Update: just as expected, the confidence-preservation brigade is quick on the scene:

HUNGARY LOAN-REFUND LAW VIOLATES RULE OF LAW: BANK ASSOCIATION
HUNGARY LOAN-REFUND LAW DAMAGES INVESTOR CONFIDENCE, BANKS SAY
Because clearly marking loans to fair value would crush investor confidence. And clearly investors are dumb enough not to realize that it is precisely by hiding what is beneath the surface, that they have zero confidence in the system.

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Ever since 2012, when we first revealed that the biggest problem plaguing Europe’s financial sector is the $2 trillion+in bad debt on the books of European banks (not our numbers, the IMF’s), it became clear that the only way Europe can avoid a complete financial meltdown coupled with currency disintegration, is if it can constantly keep rolling over said bad debt (obviously the only way to do that would be to create an epic debt bubble leading managers of other people’s money to do idiotic things like buy Spanish debt at 2.75%). This is why not only the BOJ launched its mega QE in 2013, but why Draghi also kicked in with NIRP a month ago: the logic – do anything and everything to reflate the biggest credit bubble possible as otherwise European banks will have no choice but to face up to their trillions in bad loans.

Unfortunately for some banks, especially those which operate in Europe’s supposedly highest-rated country, Austria, sometimes just being able to kick the can is not enough as on occasion a law will change, having the unintended consequence of forcing the bank to admit just how ugly its balance sheet truly is. That’s what happened overnight when Erste Group, Austria’s largest bank by assets, and the third biggest bank in Eastern Europe after UniCredit and Raiffeisen, announced that, oops, its earlier forecast about the amount of bad loans on its books is wrong, and will have to rise by a massive 40%, leading to what will be a record $2.2 billion loss, and triggering writedowns.

Shareholders, not used to being told the truth and instead preferring sweet, little lies, promptly took the stock to the woodshed.

Analysts, whose job it is to predict these things, were shocked:”This is a clearly bad surprise as it comes in addition to the already ‘badly surprising’ warning issued by the group at the beginning of this year,” Natixis Securities SAS analyst Steven Gould said in a note to clients. “These announcements hurt the management’s credibility going forward.”

What was the catalyst for the early recognition of the massive writedown? Bloomberg explains:



- See more at: http://www.thedailysheeple.com/largest-austrian-bank-crashes-after-revealing-40-surge-in-bad-debt-provisions-record-loss_072014#sthash.zsq3hmaO.dpuf