Mps, the government does not discover the cards – BBC

Word of the market. Like a game of poker, the government continues to hold the cards. For Economy Minister Pier Carlo Padoan, it is in the market to be born the solution to the problems of the Monte dei Paschi di Siena. It will come out only when the government will decide what to do, without ruling out any possibility. The goal, for Padoan, is “safeguarding financial stability” and “the protection of savers.” If they doubted it could also assume an intervention in support of the recapitalization. At present, however, it has not yet developed a precise orientation of the government. Even on the participation in the capital increase to which works the Sienese bank, where the Treasury has a 4% share, which could dilute even if the market solution worked.

waiting for the plane

“the Italian banking system – he said yesterday the Minister to Camera- is able to implement effective and sustainable solutions market before any capital needs and the sufferings disposal. ” Exactly the scenario that is looming for the Mount, to which the ECB has asked to sell 10 billion of additional suffering, and awaits the results of stress tests tomorrow knowing that highlight the need for new capital. The plan of the Siena bank, which provides for a recapitalization of up to 5 billion and the sale of impaired loans to the fund Atlas, is under review by the ECB, from which a decision is expected by the end of the week, when it is also possible decision expected executive. For now, the government has put into the pot a public guarantee on the sale of loans and speeding up procedures that allow banks to recover loans difficult. A group of foreign banks are trying to form an underwriting and placement on the increase of Mount capital, and the government hopes it is enough to shore up the operation. If the state were to fall directly into the field, for example by signing an eventual unsubscribed shares and large, there is the risk of falling in state aid, and to trigger the rules of bail-in, with the sacrifice of shareholders and bondholders, that the government wants to avoid, exploiting all the margins of flexibility of the EU rules.

The burden of suffering is not only a problem for Siena, but for the whole Italian system, despite the coverage, as pointed out by a study of the Treasury, are among the highest in Europe. Along with the difficulties Brexit credit risk weigh on growth as well. Padoan has confirmed that in September the government will revise downwards its growth forecast GDP, subject to 1.2% for the ’16 and the ’17 +1.4. The rating agency Fitch has done yesterday, reducing to 0.8% this year and 1% next the expected increase of GDP.

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July 27, 2016 (amendment July 27, 2016 | 21:55)

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