Clearstream

Clearstream Banking is a Bank and a transaction clearing company based in Luxembourg (Europe) created in January 2000, previously known as Cedel (est. 1971) specialized in clearing until 1996 when it changed its statutes to become a bank. The purpose of Clearstream is to facilitate money movements around the world, particularly by handling the settlement of European stocks and bonds (estimated 40% market share in year until May 2004).

It has often been described as a bank of banks and practices what is called financial clearing. Basically, its attributions are to record each movement between accounts of different banks and calculate the position of banks towards each other. When a bank makes a movement, in lieu of carrying a case full of bills, it just transmits an order to Clearstream to credit/debit one of their own accounts and their counterparty's account(s). The system has been extended to regular companies and governments around the world.

Financial Scandal

Clearstream has been at the heart of a financial scandal since 2001 when Denis Robert and Ernest Backes released a book called "Revelation$" (Editions des arènes, 75005 Paris, France ISBN : 2-912485-28-2) followed by "La Boite Noire" Denis Robert (Editions des arènes, 75005 Paris, France ISBN: 2-912485-38-X ) describing what has been named the greatest financial scandal in the Duchy of Luxembourg. The Tribunal of Luxembourg dropped the case the 30th of November 2004 as no charges could be laid due to the statute of limitations.

In his book, Robert describes Clearstream as a money laundering machine. Secret accounts were used to hide money for the purpose of money laundering, tax evasion, accounting manipulation and fraud. Robert has been sued for defamation by Clearstream and several banks and companies incriminated by the book (50+ different cases in which the author and his editor Laurent Beccaria were acquitted in all but two cases -where damages were awarded of one Euro).

The original Reuters news article (11:27:47 December 1, 2004) describing the closing of the money laundering probe avoids all mention implicated by the statute of limitations. This is rather unusual for such a news agency, but needs to to be put into context. Deutsche Börse is now the owner of Clearstream and Reuters is dependent on it to supply its data feed to their subscribers. The article states that Clearstream successfully sued Backes and Le Figaro for libel but deliberately fails to follow up the initial judgements. The Reuters article was authored by gilles.castonguay.reuters.com@reuters.net (Tel. +32 2 287 6810, Fax +32 2 230 77 10 belgium.newsroom@reuters.com).

Ironically Reuters quotes Deutsche Boerse's Chairman Designate André Roelant stating "This announcement is very important as it closes once and for all this chapter." Another one is opening though, namely how can the press report independently in an era of emerging powerful oligopolies.