After long negotiations and months-long stalemate, the agreement between the Renzi government and the European Commission on the Italian bad banks. In these hours decisive contacts are underway between Rome and Brussels to define the details of the intervention.
The project of the Italian Executive foresees that banks' non-performing loans (201 billion euros in November, according to the ABI) are not moved to a single public institution, but in a series of private vehicles set up by the banks themselves together with interested investors, for example funds specialized in the management of distressed assets.
Bad banks will be able to buy bad loans and securitize them, ie package them in bonds that will be put on the market. Upon maturity of the bonds, investors will be repaid with the credits recovered. In the intentions of the Government, the State will come into play by allowing bad banks to buy a public guarantee on these financial instruments, under market conditions and at a rate that should be around 1% per annum.
So far everything is clear. The real problem is the credit transfer price, which – according to the latest rumors – should fluctuate according to the Italian authorities between 20 and 30% of the nominal value. However Margrethe Vestager, the EU competition officer not insensitive to resistance from Germany, has aired an unacceptable possibility for Rome: essentially, according to the Danish commissioner, if the banks sell the non-performing loans to corporate vehicles at conditions other than those of the market, they will still go through a resolution procedure, which will result in heavy losses for shareholders and subordinated bondholders.
Even Vestager's position, however, leaves more than one doubt open. First, we need to clarify a what market price reference is made: “Who says it is the one dictated by the profit margin of the investors? - request Alessandro Profumo in an interview with La Repubblica – And can a supervisory force force banks with sufficient capital to bring it down and take the losses?”. According to the former number one of Unicredit and Mps, now entrepreneur-manager of Equita Sim, "the market impacts a 'supervisor risk': and it is frankly a lot”.
In any case, Matteo Renzi believes that "the bad bank is not a crucial issue: it's not like if you do it, the world changes and if you don't do it, it doesn't change". The Premier, interviewed by Rtl 102.5, reiterated that "Italian banks are much more solid than what international investors have verified in recent hours, even if this perception of solidity already yesterday seems to have returned".
At the end of the morning, Piazza Affari gained 1,8%, driven above all by the new rebound of Mps (+12% after yesterday's +43%) and by Intesa Sanpaolo's +3,3%.
