The government approved a decree that allows the Monte dei Paschi to request help from the public, probably for a higher amount to 5 billion euro, of which Mps went hunting on the market. With the public shareholder, there will be more time to define the industrial plan, leading to the balance sheet with the sale of a maxi-pack of sufferings, which in the original design it was supposed to be over 27 billion. Meanwhile, shareholders and bondholders will have to do their part in the recapitalisation. But with a protective umbrella for the small savers, detailed yesterday by the Council of ministers. Here’s what happens after the move of the government. That aid comes from the State? Who is involved? There are protections specific to the small investors? And the account of the rescue?
it Is a double support. In the first place on the liquidity, of which the bank has need seen that its reserves are precipitated and are enough for only four months. “The Treasury may issue to the banks, who ask for a guarantee on the new bonds to be issued, against payment of a commission,” decided the government. With the seal of the public, the level of risk of those bonds will be equal to that of the State (better, therefore, to Mps). Even if there were tensions market, therefore, the access to the same would be ensured. The other guarantee is that the Treasury can offer in the context of the emergency financing provided to you by the Eurosystem, which can be done, for example, appeal to the Greek banks. On these aspects, Italy has obtained from Brussels the go-ahead to cover up to 150 billion euros.
The second support relates to the heritage, and is realized through the “ ;recapitalisation measure” for which the board of directors of Monte titoli has already initiated the process. In the event of failure in a stress test (Mps them has failed, other banks might do faith the exercise Srep), the State can intervene without triggering the resolution true, and therefore the rules of the “bail-in”, which would involve also the bondholders to the senior and depositors over 100 thousand euros. The Ecb will have to check how much capital you need in the light of the restructuring project,
As said, are left out of this form of saving (which follows the rules of the so-called “burden sharing”), the holders of senior and account holders. The recapitalisation of precaution involves the conversion of subordinated bonds into shares of the bank. The government has decided to pay a high price to the holders of these securities: the conversion of the bonds Tier 1 – which are mostly in the portfolios of institutional investors – expects to receive shares for 75% of the nominal value; the bonds Tier 2 capital – subscribed by retail customers – provide a conversion to a value corresponding to 100% of the nominal value.
The mandatory conversion of the subordinated shares, 100% of the nominal value is not the only guarantee for the subordinatisti that will meet the mandatory conversion. “The decree-law contemplates the possibility that the bank concerned by a recapitalization of precaution on the part of the State, which involves the conversion of subordinated bonds into shares, the offer obligations that are not subordinated in exchange for the shares the fruit of conversion. The Treasury may purchase such shares,” in fact the government. At the end of the mechanism, therefore, the old savers, the subordinate will have in hand senior bonds. Here’s how the Cdm has synthesized the technical steps:
1. The bank proposes to trade the shares in result of conversion of subordinated bonds with obligations that are not subordinated to the new emission.
2. The Treasury buys the shares traded with the oblig ations that are not subordinated to the new issue.
The repurchase of shares result of conversion from the subordinated bonds is intended to prevent litigation related to the marketing of the bonds.
The decree-law establishes a fund of 20 billion euros, which the Government can draw on the individual measures on capital and liquidity, depending on the need. In the case of the Mount, the total participation could be worth 7 billion. To fund it serves in the issuance of new debt. The government has obtained from the house and Senate the green light to correct the public finances and the need for measures “for the protection of savings”, until note on the occurrence of 20 billion. In practice, the saving will fall on all taxpayers. The minister of Economy, Pier Carlo Padoan, explained that from the point of view of accounting affects the financial statements by 2017, and that the displacement on demand does not impact the objectives of the structural deficit. But for the debt you refer the ball to the next Document of economics and finance, you will need to take note of the changes to th e public accounts and explain how to keep at bay the amount of the total debt. A mole watched closely in Brussels, where a soon to be published ad-hoc report on the weakness of the Italian.
- Topics:
- Mps
- savings
- increase mps
- savers
- investors
- banks
- Italian banks
- Starring:
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