Le Crédit Lyonnais

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LCL (Le Crédit Lyonnais) is a French bank, previously known simply as Crédit Lyonnais. It was, at a point, the largest French bank, and it was state-owned. It has been the subject of various financial scandals, which almost led to its bankruptcy in 1993.

[edit] History

Founded in 1863 in Lyon by Henri Germain, Crédit Lyonnais was nationalised in 1945.

During the 1990s, the bank was the subject of numerous financial scandals, contributing to a huge debt of around 150 billion French francs (nearly 23 billion Euros). This was caused by directors exaggerating investments and by problems with the bank's subsidiary companies. The bank's motto of the time was "Le pouvoir de dire oui", or "the ability to say 'yes'", and saying 'yes' was indeed something which the bank did rather too often.

Crédit Lyonnais notably owned the MGM movie studio for a few years, during which time Giancarlo Parretti was the chief of the studio.

Much of Crédit Lyonnais' Paris headquarters was destroyed in a major fire on May 5, 1996. The fire began in the main trading room of the bank and was one of the worst fires to damage a Paris building in 25 years. The fire burned for over 12 hours and two-thirds of the building was destroyed, along with crucial bank archives and computer data.

The bank's finances were saved from disaster by moving its debts and liabilities into a new state-owned company, Consortium de Réalisation (CDR). The CDR notably agreed to pay £525 million US to California's Department of Insurance in order head off a lawsuit concerning the Executive Life insurance scandal. The CDR is a highly controversial creation, as many do not believe that the French government should have bailed out the bank.

In 2001, Denis Robert and Ernest Backes book, Revelation, showed that Crédit Lyonnais was one of the many banks to detain unpublished accounts in Clearstream, a Luxembourg-based transaction clearing company, which has been accused by the authors of being a huge international money-laundering machine.

In 2003, the bank was bought by Crédit Agricole and its investment banking business was spun off to an existing subsidiary of Crédit Agricole, Crédit Agricole Indosuez, which was renamed Calyon. Crédit Lyonnais continues to exist as a nationwide retail consumer bank.

In 2005, Crédit Lyonnais became LCL (for Le Crédit Lyonnais), probably in order to remove obvious references to its troubled recent history. At the same time, the CDR had to pay back 135 millions Euros to Bernard Tapie (or rather to his creditors), the controversial billionaire, after a scandal concerning the sale of Adidas.

In the United States, Crédit Lyonnais is now known as Calyon, whereas in France, Crédit Agricole and Crédit Lyonnais maintain their separate entitites.

The bank may be most known for its sponsorship of the Tour de France as many will remember the corporate brand on the sides of the maillot jaune (yellow jersey) that Lance Armstrong, Joop Zoetemelk, and many other phenomenal cyclists have earned over the years.