Daniel Gros: “the Right evaluations the Ecb, and remains, the node suffering” – The Republic

ROME - “I don’t understand why so much irritation from the Italian to the Ecb: in the end, what he said? The need to set aside another fund as a precautionary three-billion addition to the capital increase, to be used only in the extreme case of a recession is frightening that overwhelms once again everything and everyone. Where is the scandal given the “books” which has made us accustomed to the Mps?” Daniel Gros, economist and German but not so German as Weidmann or Schaeuble, this time down in the field in favour of the “hawks” in Frankfurt, those against, on the other hand, lance in rest of the Italian govern ment.

She ranks with those who believe that behind this uprising lies in the embarrassment of the lack of checks on the Mps and the other banks in the defeat?
“Let’s be clear: there is good reason to believe the Italian premier when he says that is was caught, and also to a Novel when he asks the Ecb to explain the criteria that have led to the request of “ipercapitalizzazione”, as it is called in the minister, and indeed yesterday the bank has started to do. The substance remains that the Ecb has focused an hypothesis very remote. Our analysis (of the Center for economic policy studies of Brussels, Gros directs, ed.), coincide with the conclusions of the Eurotower. If the Italian authorities are convinced that the Montepaschi once capitalized, will be a solid bank and unassailable, what does their predict another fund to which 99% will not be necessary to draw from? It is not a loss or an additional debt for the State. Coming to your questio n, the government, the Consob and bank of Italy, should do an examination of conscience more thoroughly. Not is investigated on the past nor correct the present”.

namely?
“for two years, from the directive on bail-in, have not been able to explain to investors that their bonds had become more risky. And in the present, you use formulas such as the refund, after transformation into actions of their securities, the holders of subordinated retail of Mps, without considering that among these there are hedge funds that then would be reimbursed by the State.”

There are among the “refundable” customer “sensitive” that you should be unhappy?
“Nah, it’s just that it was considered inopportune to politically enlarge the audience of those who lose money. The way to resolve at least part of the problem there is, only that it is complicated: go to fish and to distinguish the bondholders of more ancient date, the real savers who may have been in some measure deceived by speculators who have entered the last. In an efficient system should be possible. But the basic problem is not this”.

let me guess, are the Npl?
“of Course. You need a system solution. Now it is out of the game, for the Mps, even the Atlas. It is seen that the selling in tranches is totally inadequate. We must return to the discourse of the bad bank where it was interrupted: and that is, in the claim of Italy to give excessive values to the suffering. It is here that Brussels was the opposite, because there were State aid. But if it drops to more realistic assessments, will not be enough twenty years to resolve the issue. And meanwhile, the losses are added to losses “.

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Interviews economy

Starring:

Daniel Gros