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This article was published on 30 January 2016 at 11:46.
The last change is the January 30, 2016 at 12:16.
Italian banks are well capitalized and no further capital increases, but something in the mechanism crisis prevention of the financial system did not work properly and need to review some of the new rules on “bail in” adopted at European level has two main themes to heart the governor of the Bank of Italy, Ignazio Visco: the soundness of the credit system Italian and possible correction mechanisms that are penalizing over the demerits. And he stressed very clearly in the customary address to Congress Assiom Forex.
Look ahead and reduce the structural costs of banks
“Italian banks are well capitalized,” Visco said this morning in Turin, stressing the merits of ” prudent action and pressing the Supervisory Italian and, for more than a year, to the European one. ” Impaired loans are in fact “widely covered by write-downs and guarantees,” says the governor, suggesting that no additional capital increases to the Italian institutions and should therefore look ahead, not least because “the economy favors the resumption of profitability.” “It’s time to face and forcefully reduce structural costs, to lay the foundation for robust growth, which will benefit the banks themselves and the economic system as a whole.”
Start the review clause of Brrd
But is directed mainly in Brussels, and to the Italian representatives who sit in the institutions of the European Union’s appeal perhaps more important launched by Visco. The new rules on restructuring and resolution of banks (Bank recovery and resolution directive, Brrd) contain ‘clause, to be launched before June 2018, “which according to Visco” it is hoped that this opportunity is now exploited, building on experience to better align European rules, “adds Visco. The reference is clearly to the rules known as “bail in”, but only came into force, which also partly contributed to the market turmoil in January.
Visco remembers it as not been taken into account, unlike than repeatedly emphasized by Bank of Italy and the MEF, the fact that immediate and retroactive application of the rescue mechanisms “could result, as well as an increase in cost and a scarcity of credit to the economy, also risks to financial stability ‘, in relation with the “treatment of creditors in possession of bank liabilities signed years ago.”
“It would have been preferable for gradual, less traumatic, to allow savers to acquire full knowledge of the new regime and to gear their investment decisions based on the changed scenario, “admitted Visco, noting that” a targeted approach, with the application of the bail-in only to instruments incorporating an express contractual term and an appropriate transition period would have allowed banks to issue new liabilities specifically amenable to such conditions. “
On 4 banks” have acted promptly “
There is, in his speech to Forex, an all-out defense of the work of the Bank of Italy in the story of troubled banks recently saved: in the case of Banca Etruria, Carichieti, Banca Marche and Cariferrara, as in all other cases of banking crisis faced by the Supervision (about 100 over the last 15 years), has acted “carefully and promptly in compliance with the existing rules.” There were no alternatives then, according to Visco, “given the irreversible nature of the collapse and the emergence of unsustainable liquidity strains.” The evaluation of suffering particularly conservative banks in question corresponds instead ‘to the approximation of the theoretical value that would take, on average, assuming their immediate sale on the market. ”
The institutes were not saved with “public resources”
The cost of the rescue “were born not only by shareholders and subordinated bonds, for Most of the banking system through the newly formed fund resolution, “added the Governor, taking to emphasize in particular that” there were no transfers of public resources. ” In this regard, Visco added that “one of the initiatives that the Italian banking system has to consider to keep the costs of a crisis for savers including the provision of voluntary mechanisms of action, additional to the mandatory deposit guarantee systems.” Ilcosto latter mechanism, which was not referred to state aid, would be charged then the banking system, and “it would be offset by the benefits which would derive all intermediaries, thanks to enhanced confidence and increased system stability.”
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