Milan – Bank of Italy has done everything in his power to put back on track the four banks saved by decree: Carichieti, Cariferrara, Banca Marche and Etruria. And ‘the defense line of the Head of the Department of Banking and Financial Supervision of Palazzo Koch, Carmelo Barbagallo, held during a hearing before the Finance Committee in the House. Barbagallo for vigilance “it was continuing, with increasing intensity to the worsening of the business situation, and has used the full spectrum of available tools.” A position that responds to criticism of those who have seen zero savings, invested in shares and subordinated bonds, and which accuse the supervisory intervention belated respect to the worsening of the situation in time.
Infographic here is the savers involved 130 thousand people
Barbagallo has also accused the EU of having imposed the involvement of investors, noting that initially the intention of the Authority was to involve the Deposit Protection Fund ( what garanstice ic / c under 100 thousand euro), along with other banks, to save institutions. But the European Commission has blocked the operation of the Fund, a position that it did not share the Via Nazionale. At that point it was necessary to measure the resolution as it has taken shape and was not viable the way which would avoid the losses of investors.
The letter of Nicastro customers of four banks
Bank of Italy said that if you were fully activated the so-called bail-in – that is, the involvement of bondholders more guaranteed (senior) and depositors over 100 thousand euro – in addition to shares and subordinated securities they would be affected “about 12 billion euro mass ‘not protected’ of the four banks, including 2.4 billion of subordinated debentures. The liquidators ‘atomistic’, was not assured continuity of essential functions of the four banks, to the 200,000 small corporate borrowers should have asked the immediate return, with extensive damage to local economies, they would be protected only carriers of guaranteed deposits, sacrificing the claims of one million savers and places nearly six thousand employees, with a devastating destruction of value. ” A scenario that inevitably, to Barbagallo, would be taken without the decree of resolution.
In the report, the Director para also another criticism regarding the devaluation of the sufferings transferred from four banks resolved to the bad bank that has the task of selling them. The decree brought their value 8.5000000000 to 1.5000000000 (17% of the original), when an average coverage of bad loans in the banking system is above 40%. This has generated more losses, absorbed with precisely zero of stocks and bonds. Once again, the road has been indicated from Brussels: “The losses have been recognized in accordance with the methodology set effectively by the European Commission, which requires that the assessment of bad debts is carried out taking as indicators the prices presumed in case of immediate sale on the market instead of values consistent with the ordinary accounting practices, which take into account the ‘capacity’ of the guarantees and the proposed duration of the recovery proceedings. ” In detail, the competition directorate has asked to rate 25% of the nominal positions supported by collateral and 8% other.
Even Giovanni Sabatini, General Manager of ABI , the Association of Italian banks, has expressed his thoughts in hearing. General director of ABI, retracing the genesis of the decree, brought forward the intervention of the Bank of Italy stressed that according to the Association would be possible to intervene with the Deposit Protection Fund, without incurring state aid in Brussels, but in the end choice was different. As for the involvement of investors, he pointed out that “even before they were transposed European directives”, there would be losses for them in the event of compulsory liquidation, with the exception of depositors up to EUR 100 thousand. On the other hand, have a communication from the EU Commission in August 2013 asking to involve shareholders and subordinated bondholders before granting aid. The final picture of Save banks had weighed on the banking sector – which brings together about 4 billion profits – with immediate expenses by 2.35 billion (out of a total of nearly 4 intervention of the Fund for a resolution): Sabatini represent a significant commitment that will fall on a 5 million shareholders of the credit system.
The issue of the protection of investors continues to heat up the political front. Only yesterday, the minister had promised Padoan ‘humanitarian aid’ for about 130 thousand investors who have been reset subordinated bonds and shares. But the Democratic Party Francesco Boccia has curbed output of the holder of Finance: “I think the minister Padoan the phrase ‘humanitarian aid’ is passing. In all of this there is nothing humanitarian. I would call action of solidarity, so as we will call the bottom “that will serve to alleviate the difficulties of investors, largely unaware of the risks they were facing. As part of the Stability, now it is certain, however, that a measure will not be able to ensure the full recovery of invested capital: “It ‘obvious that you can not repay it all, but it is not even possible to leave people on the streets,” he Boccia explained yet. The road is narrow, because there is always the risk that Brussels raise the issue of state aid. By the weekend will take shape technically government intervention: the most quoted, at the moment is for a solidarity fund by about 100 million (less than a third of the losses of the bondholders), powered by two-thirds by banks . As for how to access the options, Brussels would push for the Spanish model, when – in 2012 – arbitration courts decretarano incorrect attitudes by banks that sold instruments to clients without informing adequately. Thus, those investors were compensated.
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