Tuesday, May 3, 2016

“Atlas? If acting as a private investor is not public aid “Video – BBC



Milan , May 3, 2016 – 21:33

Margrethe Vestager, European Competition Commissioner, Danish, 48, is a kind and direct woman that despite its role, does not use filters of any kind. Neither in words nor in behavior. It receives on its own without the public relations staff and press offices behind; accompanies us in his studio, simple and austere, refined by some family photos, “I have three children,” she says, “and I see them too little.” We are here to talk about state aid, but as the event is scheduled for a month and coincides with the day when you close the capital increase of Banca Popolare di Vicenza (ie Friday), the speech falls obviously on Fund Atlas and the current operation. Still we do not know how it will end, and even the failure to stock exchange listing.

We start from the bail-in: now you know that in Italy the government and the Bank of Italy said that the rules are to be reviewed because they increase the financial instability?

Yeah I know, but I think the problem is created when those who have invested in certain financial products did not know and it has not been informed of the risk. Now that’s a big problem: we call it improper sales. For example, if a customer goes to the bank to figure out where to put most of his pension, and instead of putting it in a normal current account (which is protected up to 100,000 EUR) invests it, without knowing that if the interest rate is higher, the risk is usually greater.

Refers to Italy and subordinated bonds sold without the correct information?

Actually happened in other countries, for example in Spain, where some banks they have set up a mechanism whereby customers can now say I have bought a product that is not worth anything, but they are not properly informed and was not what I wanted. This is an incorrect sales, and therefore investors have been compensated. The Italian authorities have said that to you has happened with the four banks recently gone under Resolution, to which we applied the bail-in (Banca Marche, Carichieti, Dear Ferrara and Banca Etruria, ed).

But it is possible or not to change the bail-in now?

Changing the rules is up to Parliament and the European Council, but since it’s only been five months since the bail-in has entered into force, I do not think it’s possible. Because first there was considerable discussion.

That someone did not understand?

Of course they had understood. The central problem is that the financial crisis were used some 5,000 billion euro, of which 700 billion was used cash, or as guarantees to rescue the banking system. I have a lot of money, and money of taxpayers who pay taxes, and who went directly to the banks. For this, at some point, many Member States, and the Parliament and the European Council decided that all this had to end, it was necessary to change the system and do some ‘cleaning. Giving responsibility to the banks and therefore shareholders and subordinated bondholders, who invest at risk to earn more, they know that if things go wrong they have to pay; in this way it becomes more prudent. Maybe it is a bit ‘more boring to the bankers, but at least you focus more and not put at risk the money that people entrusted to you.

You have now made a deal with Italy to compensate defrauded investors. Because in this case allow the government to use public money for compensation?

because it has nothing to do with who may gain or lose from an investment. Here we talk about poor people even who do not know finance and have trusted their banks but have been cheated and bought financial products without knowing the risk, not financial investors that risk knowing full well what they are doing. What if they deposited their money in a regular checking account they would still be there. So it is clearly a case of improper sale, and then the government can help these investors.

And why not ask directly to managers of those banks, salaried handsomely for years, and the banks themselves, and with the bail-ins are not bankrupt, to compensate defrauded?

Why can not we decide. It may decide the authorities of each country or magistrate, if there is the possibility of opening a process calling into question those who have acted in that way.

Italy had tried to save the banks using the Interbank Fund, where money paid into any bank, private. You said no, it is state aid. Because now you allow to use the fund Atlas where, in addition to banks, contributing Cassa Depositi e Prestiti and the Italian Post Office which are public?

Because you can use any funds, but if the money is public, that is, if the fund is controlled by the State and the State acts for public purposes and not as a private investor, there are consequences. But this does not mean that investors should be a private, should only act as a private investor. And Atlas is one of the cases. While the Interbank Fund is different, since it is governed by state law and is the Bank of Italy to manage it: banks are obliged to pay, and the state acts with public purposes, not as a private investor. In that case it is a state aid.

But it is not more important than where they come from money, that those who manage them?

to see if there is state aid we make two requests, to see if there is a risk to pay are citizens who pay taxes. The first: the state controls? Second, the State acts as private investors or public purposes? If the answer is no to all both questions, then it is not State aid. While if the state acts for a public purpose, either directly or indirectly controls the fund, then we have a state aid. After which it can do, but there will be consequences.

So there is no problem if there are inside Atlas Cassa Depositi e Prestiti and Italian Poste that save the banks?

not if they decide to do it yourself. If it is the law that says you have to pay, then you can not do. For me the issue is always whether you are using taxpayers’ money. Then when the government thinks there are state aid has to tell us, but so far have not done and I know we’re not asking questions. If Italy considers to tell us “here there could be state aid we would like you gave a look”, we will do it. But if you do not think about this, then we will not.

But you do not act independently to check what’s going on?

No, not necessarily. Because there may be a public company that invests like a private: pay one price and get profits. It’s fine.

Yet in some cases, as with the Ilva or in other situations, you were you to decide to take a look, is not it?

If we doubt yes, but so far we have not.

So she believes that Post and Cassa Depositi e Prestiti are investing to make profits with Banca Popolare di Vicenza?

I’m not the judge but I need them.

But if they lose money, they are still public money?

Yes, but now the matter concerns the shareholders and if the shareholder is the State participates in the risks or, at best, gains. As long as things go well there is no problem. The problem is when the state says to a company: you have to pay, and also decides how the money should be used. In that case, state aid because you are not acting as an investor in the market, and who pays does not have the freedom to choose whether to pay or not.

Has he promised the Italian government go ahead with the bottom Atlas, we will not expand ?

I do not make promises to anyone. I can not guarantee anything. If one wants guarantees then there must be an official decision of the European Commission, and for having the government must come forward.

The capital increase of Banca Popolare di Vicenza was difficult, then you can thinking that the fund Atlas was also created to save this bank. What do you think?

I do not have enough information on the issue. I know that Atlas was created primarily to solve the problem of non-performing loans, and I think it’s good to try to improve the banking system and the Italian credit. Of course, I know all this from the Italian Minister of Finance Padoan, who has a more comprehensive view of the matter, while I have a partial view.

Yet when it seems that Atlas has been created to be able to make the capital increase of Banca Popolare di Vicenza.

this I do not know, maybe because I do not have all the details of each other.

May 3, 2016 | 21:33

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