Restructuring
At the end of the 1990s, the bank experienced financial difficulties, in particular because of a high proportion of loans not repaid by customers.[15] 68% of these loans were from the former CEG Genève, 29% from the former Banque Hypothécaire, and 3% from new loans issued by the BCGE since its establishment.[16] In 2000, the institution had to be bailed out and was recapitalised by the Canton of Geneva, with the help of an ad hoc foundation (the "Fondation de valorisation") which assumed over five billion francs in loans.[14][15] Dominique Ducret, President, and Marc Fues, chief executive officer, resigned from their posts.[14]
At the same time, the bank was the subject of accusations relating to its management. In October 1999, Bernard Monnot, former director of the bank's Lyon branch, stated that 573 million French francs deposited with the bank between 1996 and 1998 had been processed by the institution in the context of money laundering.[15] Five shareholders filed a complaint against the bank in 2000 following these statements.[15] The investigation became widely publicised because Socialist MP Arnaud Montebourg, spokesperson of the French parliamentary mission dedicated to this case, accused Jean-Claude Trichet, governor of the Bank of France, of complicity by refusing to denounce the alleged actions of the bank.[17] BCGE and the Banque de France denied the accusations made against them.[17] The proceedings were dismissed: in the absence of evidence, the Prosecutor General of Geneva, Bernard Bertossa, judged the complaint as unfounded and closed the case without further action on 14 November 2001.[15][18]
However, in March 2001, the State of Geneva and BCGE brought civil actions against the former management of the bank, accusing them of having voluntarily drawn up fraudulent documents on the financial situation of the institution.[14] For the same reason, in February 2003, the State of Geneva launched a civil action against the audit firm Ernst & Young which had validated the accounts.[14] The investigation lasted several years, resulting in 280 hearings and 3,700 pages of minutes by 2007.[14] An investigation was opened in 2009 and Dominique Ducret, former president of the bank, Marc Fues, former director, René Curti his deputy, as well as two auditors from Ernst & Young were tried. They were accused of forgery and criminal mismanagement for an alleged damage of 2.3 billion francs.[14] According to the indictment, the accused having discovered that in 1996 the financial and accounting situation of BCGE was in danger, partly because of debtors at risk, concealed the information from the Board of directors by publishing falsified annual results from 1996 to 1998.[19] Instead of setting up provisions, the bank paid out
In 2017, the Ensemble à Gauche party drew up a regularization bill (PL 12238) aimed at the Banque Cantonale de Genève, which was to reimburse the sums associated with its bail-out in 2000, i.e. 3.2 billion francs.[25] The project launched a significant debate between defenders and critics.[26] In 2018, Ensemble à Gauche organised a constitutional initiative to pass this bill.[27] However, the project was rejected by the Council of State and the Constitutional Chamber of the Geneva Court of Justice. This decision was confirmed by the Federal Supreme Court in 2020, on the grounds that this would result in the bank being placed in a situation of over-indebtedness and would then be forced into bankruptcy.[28]
