Bank of Italy, the Governor asks the EU authorities to step back on the bail-in – The Republic

Rome – From the need to boost the recovery of the banking problems. Ignazio Visco, the Bank of Italy governor, addresses all the Italian economy nodes in the report last year. If the recovery started and to be consolidated, there is also a sound banking system, but tried by the crisis which certainly does not help the introduction of bail-in: during the final remarks, the governor in fact, back to ask a step back to European authorities: “international experience shows that, in the face of a market failure, timely government intervention can avoid a destruction of wealth, without necessarily generating losses to the state, and often producing gains.”

more investments and down the tax wedge

the governor does not criticize the principle of sharing of risks of bank failures by shareholders and subordinated creditors, the internal rescue itself, however, insists that “in its application must be sought a balance between this aim and that of stability. ” Request that the Bank of Italy had at the time, remembers Visco: “Unlike what has been proposed by the Italian delegation in official premises, is not a sufficient transitional period was provided that would allow all involved to acquire full knowledge of the new regime “. Anyway Visco does not invoke the possibility of public saving as a primary measure, but only as an intervention “of an exceptional nature.”

Final thoughts, the full text

After all the bail-in is a child, observes Visco, a European construction “irregular, incomplete”, which “requires, by its very sustainability, to be integrated with the missing items.” Otherwise the risk is the “rise in feelings of many European citizens, sometimes in governments who play them, the fears and prejudices that were believed buried”, and this hinders progress. In particular “the real success of monetary union, banking union, the union of capital markets, the same perspective of a common budget require you to make a quantum leap.”

All the talk of the governor ROBERTO Petrini

the long crisis, reminiscent of the governor, which unfortunately sometimes they are added “imprudent and sometimes fraudulent behavior by of directors and executives, “he brought” to the story of the four banks implemented resolution “, which shows that” the loss of confidence by the public can spread quickly and to risk causing systemic effects of persistent nature. ” It has also led to abnormal aggregation of suffering: Now this trend, with the moderate recovery underway, it is falling, so “overall concerns about asset quality of Italian banks must be taken seriously, though the no sovristimare ‘extent of the problem. “

but Visco sottolina how we are overcoming the main problem related to the suffering, and that is” the slowness of insolvency and recovery procedures “, thanks to new rules that allow” l’ Property-court assignment pledged enterprise “and to market development of impaired assets, which is making an important contribution to the Fund Atlas:” Even with relatively limited resources at the time, Atlas can show that it is possible to achieve attractive returns by purchasing suffering at higher prices than those now offered by specialized investors. “