Crédit Lyonnais lost $5B in Hollywood — then cost France €15B to save

Crédit Lyonnais was founded in 1863 and grew to become France's largest bank by the 1980s. In 1988, chairman Jean-Yves Haberer launched an aggressive expansion strategy that included becoming the leading lender to Hollywood film studios — a business far outside the bank's traditional expertise. The bank lent $1.25 billion to Giancarlo Parretti for his hostile takeover of MGM and financed numerous independent film productions that later failed.

Bad loans began mounting from 1992 as the bank's Hollywood portfolio collapsed. The film lending alone lost $5 billion. The bank was forced to disclose a massive loss for 1993, triggering a crisis of confidence. The French government orchestrated a rescue that eventually cost French taxpayers nearly €15 billion — one of the costliest bank bailouts in European history.

Crédit Lyonnais was acquired by Crédit Agricole in 2003 and the brand was gradually phased out. The scandal led to criminal convictions of several executives and became a textbook case of how a bank can destroy itself by lending to businesses it does not understand.