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This article was published on November 20, 2015 at 17:43.
The last change is the November 20, 2015 at 21:58.
The Council of Ministers will meet on Sunday afternoon at 17.30. The Government, in fact, according to Thomson Financial learns, has decided to introduce a bill to complete the mechanism of bank resolution. Directly concerned are four banks in receivership, Banca Marche, Carife, Popolare Etruria and CariChieti, for which it seems difficult the rescue attempt by the Interbank Deposit Protection Fund for the opposition of the European Commission. The intervention by decree draws an alternative route to the new European mechanism of the bail-in, which also will take effect from 1 January next and which provides in case of banking crises involving shareholders, bondholders, and eventually, if necessary, account holders of the bank accounts with greater than 100 thousand euro.
The four banks were placed in receivership after they had eroded the capital requirements required by the authorities. The government and the Bank of Italy have tried to get the go ahead from the European Commission for the creation of a bad bank in which vehicular impaired loans but from Brussels came a “no.” Non-performing loans of the Italian banking system reached a record of 200 billion euro in September.
Until the latest developments with the CDM Sunday, the decisive date was to be that of 26 November. Day the Interbank Fund convened in Rome the shareholders’ meeting to examine the file of the rescue of the four banks. But the opposition in Brussels this solution has led the government to change course. It then advanced the idea of take the path of resolution for Banca Marche, Carife, Popolare Etruria and CariChieti, the four banks at the center of the rescue plan in the works for months.
On the other hand last Tuesday, that is, since it came into force Legislative Decree transposing the European directive on bank bailouts, it has formally been set up at the Bank of Italy Authority of crisis resolution: according to reports learns, is that it could touch the implementation of the bailout of the four banks. Making use of instruments mentioned in the decree: besides the bail-in, frozen until 1 January 2016, there is the possibility of creating a bridge institution which confer good assets, and a bad bank as “download” impaired loans .
From the conversations between the Bank of Italy, MEF and Abi would emerge the idea to build eight new company: four good bank and bad bank as many, two for each of the banks in crisis. With what money? The legislation speaks primarily of market resources, and here the banks, as has confirmed the day before the president Abi Antonio Patuelli are ready to do their part; then there could be the conversion of a portion of subordinated bonds. Finally, the Directive provides Brrd state intervention: the Italian legislation has not included this part, but enough a law specifically to do so. Just the bill that could be passed by the Council of Ministers on Sunday.
The resolution plan would be built on a model similar to that adopted twenty years ago by the Bank of Naples: a healthy part brought into a good bank to recapitalize and then sell it on the market and a bad bank for liquidate assets in a reasonable time in suffering. The decree that the Government will launch the weekend, according to sources familiar with the dossier, aims to speed up the procedures to set up four good bank and bad bank as many. The first would be managed by the resolution established within the Bank of Italy. The pattern of intervention should continue to involve the Interbank Deposit Protection Fund (Fidt) that next Thursday will amend the statute and will create a new section open to voluntary contributions of the banks. The resources required for the four institutions are more than 2 billion. In part could come from the new Fund for a resolution; all Italian banks by the end of December should pour a contribution calculated for this year at about 500 million. According to a hypothesis that circulating, it could be asked banks to anticipate the effort also provided funds for the coming years. To contribute to the rescue, according to the new rules of the resolution mechanism, already this year involved the banks’ shareholders and subordinated creditors. The latter would not see repaid at maturity loan signatures that would be converted into shares of the good bank recapitalized.
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