The Refco stock Mr. Bennett pledged as collateral for the loan is now nearly worthless, damaging Bawag's own financial situation. Earlier this week, ratings firm Moody's Investors Service said the loan exposure represents a material proportion of the bank's core equity and more than two times Bawag's estimated 2005 earnings. Moody's is concerned that the potential loss content of this exposure could negatively affect the bank's capitalization."
Given what should have been known by the lender, that may have been the worst loan in modern Western World history. At some point, I'm going to have take nominations for worst loans ever. I would definitely count the 57 different Chinese banks that lent money to one guy (which he used to speculatively buy apartments in Hong Kong) as one loan.