Banks, Renzi: “Savers will be protected.” Dombrovskis: “We apply bail-in” flexibility – The Republic

MILAN – Matteo Renzi throws water on the fire and try to reassure depositors and savers of the Monte dei Paschi di Siena: “The Italian savers and depositors have no problem and for me this is the priority. The problematic issues the markets and the difficulties of the Stock Exchange are followed closely by the Italian government but concern shareholders. what interests me is that there is no doubt as to the tranquility of the Italian account holders and those who put money in the Italian and European banks. “

the Monte dei Paschi, however, continues to be the special Business Plaza, waiting observed that sounds at the shield in two steps that the government is negotiating with Brussels to prop – possibly once and for all – the bank’s capital the world’s oldest. The Sienese action (follow the title) was sold by the handful in the last days of the close of June 23, when operators have turned off the computers are convinced that the “stay” would win the referendum on Brexit only to wake up in the middle of notes with “leave” now in an unassailable lead, Monte has halved its value from 54 to 26 cents, reaching new record lows and bringing the capitalization under one billion euro. Today MPS has recovered 6%, thanks to the stop short selling for three months imposed by Consob, the title struggles to make money and then marked a double-digit recovery in the early part of the day.

a situation that has accelerated the urgency of action, in a negotiation between Rome and Brussels to find the best way to do so without encountering in state aid. “With the Italian authorities there is constant contact, we are ready to intervene in the banking sector if necessary. On the way will depend on the Italian demands,” said the new commissioner for financial services, Valdis Dombrovskis , speaking at the Economic Commission of the European Parliament. Which in any case open to possible interventions: “When we apply the rules we do it considering the circumstances: if the ‘bail-in’ (the resolution of banks involving shareholders and bondholders in the losses, ed ) it is possible precautionary recapitalization (with government intervention, ed ) subject to certain conditions, for example the bank in question must be solvent, comply with capital requirements in the baseline economic scenario “. In practice, if the stress tests are negative of an institution and the bank is solvent, you can intervene. He is echoed by Italy Under-Secretary to the Treasury, Pier Paolo Baretta : “The starting point is to protect the savings.” Baretta then adjusted a claim for which a “technical solution” would be coming up short: “No surgery is expected in the coming hours. It is monitoring the situation in consultation with the EU,” he said in a statement. Meanwhile, the economy minister, Pier Carlo Padoan, and the heads of the CDP, the President Claudio Costamagna and the CEO Fabio Gallia visited at Palazzo Chigi.

Glossary: ​​short sales and excess volatility

the fear of investors is all linked to the difficult mountain management of overdue loans in the bank’s belly, which are finished in the crosshairs of the ECB who sent a “disposal table “suffering the eve of the referendum, asking for a cleaning 10 billion over the next three years. This is why the authorities are studying to strengthen Atlas with 5-6 billion, to let him buy packages of suffering from the Tuscan bank and, if necessary at a later recapitalization, made necessary by write-downs of those packages at market prices. The EU Commission has already approved in advance by the shield 150 billion used to guarantee liquidity to the banks, and the Treasury tries to figure out if it can also function as a support to the issue of bonds being converted del Monte, ie bonds with conversion obligation actions within three years, which would then good tools to build up equity. “We hope to market solutions, because the conditions there are the Italian Government is following with great attention because our goal – added Renzi – you do not intervene to save the banking authorities but to secure the

subordinated threatened the bail-in

a Bloomberg explains why in the operating rooms of the Italian banks are considered the weak link of the shaky system European financial. The particular indicain Texas Ratio, which expresses the capacity of a financial institution to bear the overdue receivables that in the belly. The critical limit is indicated in the 100% threshold: if a bank is significantly below the critical threshold, hypothetically could withstand even the impairment of all impaired loans following the capital reserves at its disposal. If it is significantly above, it needs to run for cover. Despite the skepticism of some analysts, who criticize the index as too coarse, the figure draws a situation where Mps above 140% and the worst in Europe. Even Banco Popolare and Ubi, They indicate that some long as the possible savior of MPS, are significantly above.

The Texas Ratio of European banks: an index above 100% indicates an excessive presence of impaired loans in budgets and requires a capital injection