Milan – The government has dismissed the decree drawn by Bank of Italy and the Ministry of Economy to save four Italian banks in trouble and put away by moonlight across the network credit: Cassa di Ferrara, Banca Marche Banca Etruria and Carichieti. Operation, approved at a meeting of the Council of Ministers of a quarter of an hour, Sunday afternoon, which let you use a bank resolution, and with a commitment from EU estimated at 3.6 billion will save the operation of the four banks . That tomorrow will have the word “New” in front of their name.
It is a burden that will bear the Italian banking system, with an impact on the budgets this year and hope that the ‘bridge loan’ from turning into an ‘investment’ to be recovered in the near future, for now avoiding shock system. No recourse guarantees Palazzo Chigi, in public money or stocks, bonds and deposits, although there will be a review of fiscal discipline for the ‘new’ banks healed. It will create a ‘bad bank’, which will host part of the four banks in difficulty: the suffering will suffer a massive devaluation 8.5000000000 to 1.5000000000 of euro in order to facilitate the early sale on the market, as specified Bankitalia. Loans “will be sold to specialists in debt collection or directly managed to recover it better.”
On the ‘healthy’ bank, it will proceed to restructure and revitalize the activities, so that will give rise to four new entities without interruption operating with old doors. The presidency of the four organizations will be the former general director of Unicredit, Roberto Nicastro. Minister Woods, a potential conflict given the role of Vice President of the father in Banca Etruria, now commissioner, was in Milan for the inauguration of Torre Isozaki, headquarters of Allianz.
The government explained that ” measure allows to give continuity to lending – and work relationships – fully protecting depositors. ” The basic legislation is the new framework gestioen banking crisis, with its decrees published in the Official Gazette on 16 November, which was followed by the resolution of Bakitalia of Saturday, November 21 on measures to initiate the resolution, approved by the Treasury ‘Next day, after receiving the green light from the European Commission.
In the press after the meeting, Prime Minister’s office said that “the decree has a very limited scope. It is intended merely to provide timely new banks (banks-deck) covered by the provisions of the startup bank resolution in question; define regulatory certainty on how the contributions will be collected by the banking sector to the national fund for a resolution after the integral boot mechanism resolution only; define how to implement the new banks of fiscal discipline in the field of deferred tax assets already in place for all banks. ”
The operation is under the directive also includes the well-known ‘bail-in’, the mechanism involving bonds, shares and deposits (over EUR 100 thousand) in the rescue of an ailing bank, before public funds. A mechanism, that of the ‘internal rescue’, which is not triggered in the event of these four banks. Just to avoid getting to that point, it was thought in the past to use the Interbank Deposit Protection Fund, it takes in order to safeguard ic / c, but the solution was stopped by the EU (to the risk of ‘aid State ‘) and the procedural difficulties that would have arisen. For this reason it’s ‘Plan B’, which plans to tap into immediately by the payment (by the entire banking system) of 500 million contribution to the Fund interbank planned for 2015, along with the advance of the contribution of the next 3 years . These 2 billion, thus adding a liquidity, for consideration and will weigh only about big (Intesa, Unicredit and Ubi), to ensure the continuing operations.
And it also came the ‘ok by the EU, which is not relevant to competition concerns. As detailed in fact the European Commission in a third statement, the Fund resolution “will provide 3.6 billion euro bridge banks, and capitalize on and to cover the negative difference between the transferred assets and liabilities. In accordance with European regulations, the ‘ transaction will be financed by the contributions of the Italian banking sector to fund resolution. The measures also include a transfer of impaired assets from banks bridge to a new special purpose vehicle for the management of the assets. The Fund will ensure resolution of this measure on the assets deteriorated further strengthening the balance sheets of banks bridge. The benefit of this guarantee has been quantified at approximately EUR 400 million of additional support the resolution fund “, considered state aid in the resolution. Operation, participation of existing shareholders and holders of subordinated debt, which “helped to cover the costs by minimizing the need for state aid according to the principles of burden-sharing. In addition, to limit distortions of competition, banks bridge will exist only for a limited period, and implemented a policy of prudent management “.
Beyond the specificity of these four cases of banks to ‘save’, the overall structure of the new resolution mechanisms continues to cause controversy. Attacking consumers: “The ‘bail in’ is a” criminal expropriation of savings “, designed to” save the moral hazard of bankers. “From January 1, 2016, write Adusbef and Federconsumatori,” the bank crash and the lack of supervision central bank, will be huddled in savers and depositors through the wretched mechanism of bail-in “. According Unimpresa, the mechanism threatens the bond market to 217 billion. A study published by the European Parliament, finally, says it would have cost the mechanism if it He was already active during the years of the crisis: the Resolution Fund (which will be activated in the next eight years) would be a contribution of around 72 billion, while the private sector contribution would come to 153 billion.
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