For a governor of the Bank of Italy, the syntax is not a question of form. You message. So when Ignazio Visco among the marbles of the Palazzo Koch hall of honor chooses a verb in the passive, is the spy who speaks what is important enough to dissuade of making explicit the subject: the European Central Bank. “The most appropriate supervisory measures will be assessed the actual situation of individual banks and will be defined taking into account the context in which they operate,” said the governor Visco.
words flat and vague in appearance. in the audience of bankers and financial establishment dignitaries gathered in the palace the memory of the January stock market collapses of institutions still hurts. At the time it was enough to trigger it the news of a “letter”, actually a questionnaire, that the ECB had sent to the Italian banks and the rest of the euro on risky loans. Pier Carlo Padoan, the economy minister, even went on a rampage that left Frankfurt spend three days – not three hours – before specifying that the “letter” was not close. It was not the required banks to bring down even more in its financial statements for loans never to be repaid in full.
what was that “letter” you understand it better today , after that sentence Visco liabilities. It was the first step in a process that is now coming to the point. This summer, the ECB will present a report on loans in default or at risk of European banks: in this regard, converging information coming from the various capitals. It is not yet decided whether the central bank will appoint one by one the institutions in a kind of public report card, or if those judgments will remain confidential. If he is still discussing in Frankfurt. Certainly in the last few days had mentioned an initiative on this issue Danièle Nouy, the President (French) of the single supervisory board in Frankfurt. And it will not be a request to break down in the financial statements, but the passage that comes close is intended to put pressure on Italian banks burdened by almost 200 billion of loans in default (just under 90 net of resources set aside to cover losses).
At the ECB will ask institutions to give themselves guidelines , organization and especially a roadmap to better manage or sell that legacy of the Great recession. Not right away, but not indefinitely. “The heads of European supervision are aware that the reduction in impaired loans will only be gradual,” Visco pointed out yesterday, this time clearly indicating the subject. They should not, therefore, come from Frankfurt constraints to give the bad parts of bank balance sheets in the short term would be the best way to force the banks to sell off, accumulating even greater losses, thus creating even more need for fresh capital.
However, the ECB wants the banks begin, and at certain times. The request is that you give plans, managers and their specific means to handle these problems. But not only in Italy. Ignazio Visco yesterday shine let the ESA will exercise even more attention on the big German banks: “We strive for the action becomes more effective with respect to other risks on bank balance sheets,” said the governor, “primarily those related to activities in structured products. ” Just covered the reference of the governor, first, to Deutsche Bank. And certainly the ECB now seems more ready than before to check on their own the real value of derivatives they invest in some large institutions in Northern Europe.
not that the Visco position is comfortable. in Frankfurt, which now has the last word on supervision, the country’s institutions are being open distrust and the Bank of Italy is suspected of want them to defend after having been surprised by some of their problems. To the south of the Alps rather too many bank managers of the province have been reported not to have realized that times had changed. Maybe that’s why yesterday Visco did not discount either European Banking Union, nor to the particularism Italian bank: the governor is unfair that you try to take the Bank of Italy between a rock and a hard place. On Europe, Visco underlines the contradiction of having removed the countries their old national instruments to manage financial crises, not that I had prepared European instruments: for now the guarantee fund for deposits remains blocked by the veto of Berlin and the bottom of resolution is in fact not operational. “It’s a situation of vulnerability,” noted the governor. As for Italian banks, the message is no less firm: for Popular must end the era of ‘self-vertex, lack of transparency, resistance to change. ” And for all it is time to think about reducing costs, including closing of the current 30,000 branches, and to focus on technology and mergers. In a pact, however, which is a program: yes mergers between banks, but only “strictly according to industrial logic.” No chairs or clienteles.
May 31, 2016 (modified May 31, 2016 | 22:50)
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