The Prague Business Journal reported yesterday that Societe Generale, the winner of KB tender, has indicated that additional provisioning may be needed at KB concerning its exposure to collateralized debt obligations (CDOs). The PBJ also reported that KB started buying CDOs before trading limits on the instrument were put in place. Finally, KB’s chief treasurer has been stripped of his powers to sign trades on behalf of the bank in connection with the CDOs. KB’s supervisory board should discuss the CDOs this week and the results of the central bank’s inquiry into the issue. Negative.
(Ondrej Datka)