It seems that, when one suffers the effects of a wrong financial investment, a financial scam or a banking crisis, individual and collective memory tends to quickly remove the offense received and makes us ready to expose ourselves to new risks without particular additional precautions .
Financial education, in order to act as a preventive factor, should, among its first objectives, keep alive the memory of those events, so that the negative lessons learned in different circumstances are not forgotten.
We are however certain that few have the perception of how many and how deep have been the major banking and financial crises that have occurred in Italy in the last thirty-five years, that is to say in the span of a single generation.
Reviewing them briefly, we will see recurrences of causes, interventions "to escaped oxen", few actions to thwart new ones.
1982 Banco Ambrosiano, a crisis of intertwining between more or less strong and more or less hidden powers (the notorious P2) and from embarrassing proximity to Vatican finance. Only a month before the final explosion, the authorities had authorized the listing of Banco's shares on the stock exchange. The intervention of the Catholic Andreatta (then Minister of the Treasury) in defense of Italy's reasons against the Vatican is memorable for the sense of the state. The cost of the bankruptcy was a few thousand billion lire, resolved thanks to the merger with the rich Banca Cattolica del Veneto.
1987 Savings Bank of Prato, a local bank with financing concentrated in textiles, was long run by politically connected bankers. It financed speculation and increased its risks disproportionately. It was the first intervention of the Fund for the Protection of Deposits, which had just been set up in accordance with the law and in one fell swoop it absorbed the funds collected from the system.
1992 Montedison, financial crisis of the largest private chemical group, with losses estimated at 30.000 billion lire. He reflected on the balances of Banca Commerciale Italiana, in whose income statement the revenues from that business relationship accounted for 15% of the total.
It was always 1992 when the Cassa di Risparmio di Venezia, the oldest in Italy founded in 1822, went into default due to a series of erroneous forecasts on exchange rates (preceded by the abnormal growth of loans in foreign currency without expecting exchange rate risk coverage by borrowers, most of which devaluation of the lira became insolvent). The size of the losses, on the one hand, called the Venetian sisters together, on the other, triggered the crisis of other savings banks and special credit institutions in the region. What remained gradually merged into the Intesa group at the end of a complicated process of absorption that lasted until 2014.
A short time later, the most virulent wave will follow, which will sweep almost entirely the Venetian banking system, some heirs to institutions dating back to the Napoleonic era, others to the first banking institutions of social Catholicism at the end of the XNUMXth century. Recalling its ancient splendor are the wonderful palaces on the Grand Canal now used as luxury hotels, the Palladian villas and parks nestled on the Treviso hills, prestigious headquarters now half-empty and the personal jets of top managers used to pursue dreams of expansion towards Europe of the East and that it is hard to scrap, now that a bicycle is enough to cover the distances between Vicenza and Montebelluna (see infra).
1995 and following Southern savings banks (operating in Puglia, Campania, Calabria, Sicily). They were generated by patronage relationships, credit concentration, relations with politics. They were merged into more solid banks, such as Cariplo, which later merged into Banca Intesa.
1995 Bank of Naples, originating from the same crisis factors, after the end of public interventions in the southern economy through the Cassa del Mezzogiorno, cost 12.000 billion lire, with public intervention through the so-called Sindona Decree. Together with the crises described above, it led to the disappearance of the southern banking system.
1998 Bipop of Brescia, one of the many cases that can be linked to the phenomenon of man only in command. The examples have been repeated in a crescendo that reaches up to the latest disturbing episodes of bad management in the banks of many regions of Italy.
2002 Placement of toxic banking products called My way and Four you by Monte dei Paschi di Siena and its subsidiaries. The scandal forced the bank's top management to resign and many betrayed savers to be repaid. The deeds of Banca 121, an Apulian subsidiary of Monte, are still cited by insiders as an example of financial fraud.
2003 Cirio, Parmalat and Argentine government bonds. Banks earned commissions by placing these bonds without warning about their risks to completely unprepared underwriters. Indeed, up to the very end, some of these securities were listed among the risk-free securities indicated by the ABI.
2006 Banca Italease was the largest Italian bank specializing in real estate leasing. It was also the victim of the concentration of power in the hands of a single man and of business with the "cunning people of the neighborhood", already known for other banking raids. The Bank was a bitter pill to digest by Banco Popolare, which definitively incorporated it in 2015.
2006 Banca Popolare Italiana (formerly Popolare di Lodi absorbed by Banco Popolare) entrusted to the thaumaturgical virtues of the banker Fiorani. He credited himself with defending the Italian character of banks that had become attractive to French, Dutch and Spanish bankers. The defense, organized picaresquely, failed, leading to the resignation of the Governor of the Bank of Italy, who had naively believed in him. At that stage, he changed ownership of BNL, one of the most important institutions in Italian banking history of the twentieth century and, a few years earlier, among the top 10 banks in the world.
2008 Monte dei Paschi, the most serious and longest banking crisis, still ongoing. It has so far absorbed resources for 30 billion, eventually requiring entry into the state capital as the majority shareholder. Discussions with the European Commission and the ECB on the methods of the bailout are still ongoing. The well-known cause was the risky purchase of Banca Antonveneta, having obtained the authorization of the supervisory authorities even in the absence of due diligence. When, in 2011, the deleterious effects of the acquisition were already fully evident, he left the appointment of the most responsible as Chairman of ABI dumbfounded. The legal proceedings are in progress.
2011 Financial crises of Alitalia and Ilva, still open; debts to banks will require the state guarantee.
2012 Carige, the tenth largest bank in the system, included among the significant ones according to European supervisory legislation. Scandals linked to the relationship between banks and insurance companies and the long dominance of its historic exponent are the causes of a crisis to be overcome by means of a substantial capital increase, which is still being quantified.
2015 Banca Etruria, Banca Marche, Cassa di Risparmio di Ferrara, Carichieti, local banks under resolution according to the new European legislation. Causes: mismanagement, political interference, conflicts of interest, overwhelming power in the hands of a few, lending transactions that are not consistent with the characteristics of a local bank. Purchased for one euro from two large cooperative banks. Costs for the system and the community: more or less 5 billion.
2013/2017 crisis of all the former savings banks of the four provinces of Abruzzo, up to the more recent savings banks of Cesena, Rimini and San Miniato; for the causes see above. Aggregated or to be aggregated into larger groups.
2014-present Banca Popolare di Vicenza and Veneto Banca, also among the top 15 systemic Italian banks, according to the Banking Union classification. Abnormally grown, due to the wishful thinking of their best-known exponents, it will require public recapitalization intervention as a precaution, to integrate the insufficient contributions of the Atlante Fund, in view of their merger. The losses for the shareholders are very serious. If the latter do not accept a transaction proposal involving losses of 85 per cent of the value of the securities, at the same time abandoning the legal proceedings, their insolvency and recourse to the bail-in will be ratified, with the presumable involvement of bondholders and depositors.
2014 and following crises of numerous cooperative credit banks, of significant size for the category, operating in northern and central Italy. They have required onerous interventions by the Guarantee Fund for Depositors and the temporary one envisaged by the sector reform law, to avoid direct impacts on the saver. The establishment of cooperative banking groups is awaited, to strengthen the overall stability of the system.
2017 Essential recapitalization of Unicredit, by foreign investment funds for 13 billion euros, to reduce the enormous amount of anomalous loans.
In summary, the crises concerned:
a) all types of institutions (Banche SpA, cooperative banks, cooperative credit banks) and of all sizes (large, medium and small banks);
b) extensive territorial areas, with the disappearance of the southern system and the strong weakening of bankingly important regions (Veneto, Tuscany, Liguria, the Adriatic backbone of credit, from Emilia Romagna to Puglia). It can finally and cynically say that in many areas of the country there will be no more banking crises because… the banks are finished!
The crises have seen:
c) the frequent placement of high-risk instruments, without adequate information or with distorted information to the consumer, up to the cases of bonds and the toxic banking actions of recent times;
d) the adventurism of not a few bankers, which has not received adequate contrast from the authorities in due time;
e) events not always connected with the cyclical phases of the economy and with the most recent recession.
Read also "Italian banks, the three real causes of the crises".
