False start for the floor Dragons: banks only 82.6 billion – The Republic

False start for the floor Dragons: banks only 82.6 billion – The Republic

Disappoint the first round of financing maxi launched by the ECB to help the ‘real economy. The operators are blaming the expectation of the test results of supervision and lack of demand for credit “good.” Italian to 28% of the total funds

ANDREA GREEK

MILAN – Part slowly Mario Draghi’s plan to boost the economy of the Eurozone. The ECB awarded 255 banks 82.6 billion euro in the first round of ‘Tltro’ ( targeted long term refinancing operations ), the new maxi-lending banks granted to four years to 0.15 % and this time conditional grant loans to the real economy. It is a lower than analysts’ expectations which estimated a fork between 100 and 150 billion euro institutional applications in the first round. The next auction will be held on 11 December, but the interesting subjects must apply by November 20.

Banks accredited to participate in the subsidized loan of Frankfurt, and is aimed to make more loans to households and companies in Europe, were 382 But as for the volumes, many of them (127) were the window. The experts explain the false start with different motivations. One is that institutions located in countries with a lower credit risk – in addition to granite Germany, Scandinavia and the Nordic countries in general – are easy to access market financing at rates even lower; and a cold reception they had already seen with similar auctions of the ECB LTRO 1.000 billion three years ago.

The other reason, contingent, concerns the task of examination results that regulators are closing in on 128 major European, and that will be announced on October 17 in view of the unique watch (Part 4 November). Despite official statements, it is difficult not to see a stop to the desire to make credit of the banking sector in the double test in progress, which will be much more stringent than those of 2011 and have already caused about 200 billion capital strengthening in European banks only in ‘ last year. The other explanation is structural instead: European companies trudging, even those that export more are struggling to keep pace with the American and Asian competition, with the euro nailed around the turn of 1.29. In short, if there is no demand for credit – especially good credit, one for new investments and initiatives, not to replace the old debts or thin the capital – it is rather pointless to provide credit to households and businesses. Also because there is a risk for the institutions of a reverse selection: become a customer of the worst payers.

“It ‘s possible that banks are waiting for it to expire of their existing bonds – said an industry analyst – for otherwise how low the rate Tltro would be additional. If there was strong demand for credit and an increase in short term, institutions may still join the auction, but for now it does not seem so. ” In any case, in the auction of December, you will see something more, that the market estimate that at least double the 82 billion demanded by lenders as soon as the ECB.

UniCredit confirms that it has been allocated 7.75 billion euro for Italy: the amount will be used, as required, to achieve financial instruments for enterprises and households and foster the best conditions for growth and development in the Italian market. Unicredit will also participate in the next auction in December to acquire additional funds for the granting of new loans and financing: in total, the maximum amount that the bank intends to ask should be about 12 billion euro.
Intesa Sanpaolo has instead drawn funds for 4 billion, with the intention to ask for more 8.5 Tltro auction in December. Monte dei Paschi scored 3 billion, Banca Popolare Emilia Romagna 2000000000, 2240000000 ICCREA Bank (on behalf of nearly 200 cooperative credit institutions), Banco Popular and Credit Valtellina 1 billion apiece, Credem 735 million, Carige 700 million, 570 million Mediobanca.
not have asked for funds Ubi, BPM and Popolare di Vicenza, while it is not clear participation and Veneto Banca Popolare di Sondrio. The total weight of the Italian institutes on the first auction Tltro stood at 28%, amounting to about 23 billion euro.