Raise your hand if you believed that Matteo Renzi would have really hit the reform of cooperative banks in the first shot. The various governments and Parliament had been trying to reform one of the fundamental sectors of the banking system for twenty years, but to no avail. From Draghi onwards, even the Bank of Italy, which openly supported the Renzi reform, had tried in a thousand ways to exercise its moral suasion on the Popolari but with little success. A transversal lobby orchestrated by the powerful Assopopolari has always hindered and then scuttled every change project. With often laughable arguments.
Matteo Renzi broke the spell and revealed to everyone that Assopopolari was a paper tiger and that it was enough to go ahead with determination to liquidate resistance and obstructionism that undermined the path of reform. In the end, even the most enlightened cooperative banks understood that the reform was inevitable and that they themselves would benefit greatly from it. The surge in Popolari stocks on the Stock Exchange, which in some cases has reached 70% since the beginning of the year, is there to say that, even before Parliament, the market had already promoted the reform that will oblige the large cooperative banks to turn into joint stock companies within 18 months and to abolish the per capita vote.
A reform that is not rhetorical to define epochal. For at least three reasons. Firstly because it finally introduces elementary criteria of financial democracy for the large cooperative banks which in most cases have freely decided to go public. No one has ever been able to demonstrate how listing on the Stock Exchange could reasonably be reconciled with the defense of the per capita vote and it would have been curious to see what the large cooperative banks would have done if they had been faced with the alternative between remaining on the Stock Exchange and loyalty to the per capita vote, behind whose defense, as Renzi effectively recalled, in many cases only the income from the position of the local lords of the Popolari was hidden. From now on, in the large popular stocks, shares will be counted and no longer weighed. It counts who opens the wallet and who risks investing.
Secondly, the reform can truly be defined as epochal because it was made to wait for at least twenty years if one considers that the first serious attempt to abolish the per capita vote and to reform the cooperative banks was made at the end of 97 by Mario Draghi, then director general of the Treasury with Carlo Azeglio Ciampi minister, with the first draft of the TUF (the Consolidated Law on Finance). But even then, Assopopolari's reaction was furious and the abolition of per capita voting disappeared in the final version of the TUF. Assopopolari lost twenty years fighting rearguard battles by refraining from proposing self-reform hypotheses that would have allowed the Popolari to be valued sooner and more and to avoid legislative intervention.
During the debate on the reform, Renzi – who had the wisdom to distinguish between large and small Popolari limiting the reform only to institutions with more than 8 billion euros in assets – anti-reform arguments were heard which to define as bizarre is an understatement. First there was the cry of pain against the distortion of the cooperative spirit as if the freely chosen listing on the Stock Exchange and the growth up to the size of large national players had not already profoundly changed the original nature of Popolari, making difficult to distinguish them from large commercial banks. Then the Cossack assault on St. Peter's was evoked, imagining foreign groups and capital to conquer the flower of our major Popolari, ignoring the supervision of the Bank of Italy and the ECB. Not new arguments if one only recalls the many short-sighted resistances of those who defended the political management of credit by opposing the privatization of Credito Italiano and Comit twenty years ago which, incidentally, are still in Italian hands.
Finally, the reform can be considered epochal because it modernizes and enhances an essential segment of the banking system, paving the way for greater efficiency, dimensional consolidation and capital strengthening with access to the capital market made easier by the transformation into a joint stock company. The possibility of maintaining the 5% limit on voting rights, but only for two years, will increase contestability without paving the way for adventurous takeovers but giving the large cooperatives the time necessary to study the most useful combinations. After all, the valorisation of Popolari shares on the Stock Exchange suggests how much value can be extracted for the benefit of shareholders from banks freed from the armor of "local squires" and finally entrusted to a regulated market.
The reform had the wisdom, as mentioned above, to distinguish between the large Popolari (11 out of 37) and the medium and small ones which still have a cooperative imprint and a real link with the territory of origin and which therefore will be able to maintain the current structure (including per capita vote) or, if they wish, gradually adapt to the principles of the reform. But there is no doubt that it will make all its value felt on the entire sector, allowing the comparison between two different Popolari regimes.
It was also wise to exclude the CCBs from the reform, whose cooperative spirit is stronger and which it is right to distinguish and value from the rest of the banking system. But for the very large CCBs, such as the one in Rome which has assets of 30 billion, the defense of the current regime is becoming more unthinkable every day. But even here you can't make a bundle of all the herbs. There are CCBs that are no longer standing and are a tangle of inefficiency, undercapitalization and conflicts of interest, but there are other CCBs such as those of the Raiffeisen group in Trentino Alto Adige or those of the Cabel circuit in Tuscany which are jewels that must be kept separate from the Federcasse bandwagon.
However, the die is cast. And the Renzi reform is only the first step in the modernization of the banking system. The next challenge will be on the bad bank.
