Failed banks, Vegas attack: “Who bought subordinated bonds had clear all risks” – The Messenger

The statements of subordinated bonds of bankrupt banks (Carichieti, Banca Marche, Banca Etruria and Cariferrara) have “been prepared in compliance with the transparency rules laid down by the prospectus” and “gave most clearly to all the risk factors associated with the complexity of the instruments and the situation in which they poured the banks “, including when the risk of” losing the full amount invested. ” I said Giuseppe Vegas, chairman of Consob, in his speech to the financial market, defending the work of the authority and fulfilling essentially the banks that sold the securities. In other words only in a small number of cases one can speak of “deception” because a higher yield than ordinary bond would have to trigger the thresholds of attention in anyone.

“The events related to the liquidation of four banks not bring into question the validity of the bottom of the supervisory models on the performance of investment services “, he stressed Vegas, remembering that” our supervisory model was examined and positively assessed by both the international Monetary Fund, at the Financial Assessment Program conducted on Italy in 2013, both by ESMA, on the occasion of the supervisory practices on the implementation of the MiFID (the European directive on financial services). “

Vegas recalled that since 2007, the year of introduction Mifid, “Consob has made about a thousand interventions in the field of investment services vigilance” with a cover of “about 90% of the savings invested in financial instruments related to retail customers, while the audits have covered the 55% of market”. “However – he added Vegas – Consob is making the experience so gained in guiding and refine further its supervisory practice.

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The chairman of Consob also reiterated, as he had in hearing before the Senate, as the phenomenon of subordinated bonds become “waste paper” has been limited, “the amount held by retail customers at 30 June 2015 was 374 million euro, equivalent to 1,17% of the total “subordinated bonds issued by banks and held by investors.

the prospectus’ remains too long and complex document to be read and fully understood by saver,” then underlined the chairman of Consob, announcing the launch of “consultation” on three recommendations to “clear information” and greater “transparency”. Vegas has also highlighted that “an excess of information almost always tantamount to a lack of information.”

“The prospectus, imagined by the Community legislature as a container that would gather all the information about the product and the person who it is drawn has not proven an appropriate means to provide an effective response to the need for knowledge, “he added the chairman of Consob. Vegas then recalled that the Commission ‘was one of the few European authorities to require the inclusion, in the opening pages of prospects, of a specific section, called “warnings for the investor”, which contains a description of the main risks investment. In difficult cases, he was asked – he says – the inclusion of this information in the prospectus cover, so as to better attract the reader’s attention. ” Moreover Vegas, citing “the recent cases of increase in banks’ capital,” stresses that “Consob has recommended the systematic delivery of the warnings, which was not foreseen by the European regulations, in order to push the customer to take specific knowledge of their contents.”

In 2015 they were brought to fruition by Consob 268 sanction proceedings, of which 236 were concluded with the application of sanctions. The total amount of fines applied, as is clear from the annual report, amounted to approximately EUR 12.1 million (compared with 20.6 million euro in 2014 compared with 160 cases of which 140 concluded with ‘ application of sanctions). Every year, it is noted, there may be discontinuities assigned to the case and the comparison between the data in 2014 and 2015 data must take into account the fact that, in 2014, over 16 million of the penalties issued were related to 4 emblematic events ( the two highest in Monte Paschi di Siena and Proto sanctioned a total of respectively 5.7 and 4.5 million Euros), while in 2015 there were no sanctions issued for equally emblematic events (the higher of the sanction relates to Tercas and amounted to 976 thousand euro). As market abuse the Consob last year challenged offenses in 14 cases out of 17. In 11 cases has been formulated the hypothesis is criminal and the administrative offense.