The decree on Veneto banks becomes law. The Senate approved the trust requested by the Gentiloni government with 148 votes in favor and 91 against. So the journey of Popolare di Vicenza and Veneto Banca officially begins towards compulsory administrative liquidation and the integration of the good banks into Intesa Sanpaolo.
The provision, which had already received the go-ahead from the Chamber which had included the provision on the suspension of payment of the Veneto Banca bond, therefore had the go-ahead for conversion into law.
There was no lack of controversy in the Chamber: at the end of his speech, M5S Senator Enrico Cappelletti, addressing the majority, stated: "You took everything, take these too!" and immediately afterwards hundreds of counterfeit banknotes are thrown into the hemicycle from the 5 Star benches. The gesture is accompanied by shouts aimed at the benches of the Democratic Party: “Thieves! Shame!". Among the most aggressive Barbara Lezzi and Alberto Airola called to order by the current president, Maurizio Gasparri.
Veneto banks: what does the law provide?
Based on the provisions of the decree the "healthy" part of the two banks will be sold to Intesa Sampaolo, for the symbolic sum of one euro, which will also include the related personnel.
In order to ensure access to credit for households and businesses, but also the restructuring of the two institutions in liquidation, the Decree establishes an injection of public resources of around 4,8 billion euros in support of Intesa San Paolo. Also considering the guarantees and against total commitments of 10,9 billion, the Ministry of the Economy expects to close the liquidation in twenty years with returns in the order of 11,6 billion. The margin would therefore be positive for 700 million.
The operation involves the elimination of shares and subordinated bonds of the two institutions, as established by the mechanism known as burden sharing, a procedure according to which, in the event of bank failure, it is envisaged that before the involvement of public funds, the reduction of the nominal value of the shares and subordinated bonds is implemented , or the conversion of the latter into capital. Thus the bail in was averted, while compensation is envisaged for small savers holding bonds.
In detail, the subordinated creditors of Pop Vicenza and Veneto Banca, who are also investors, will be entitled to a compensation mechanism similar to that established a few months ago for the four good banks placed under resolution in November 2015 (Carichieti, Cariferrara, Banca Marche and Banca Etruria). The lump sum refund (80% from the interbank fund for the protection of depositors, 20% from a contribution from Banca Intesa) will be valid for securities subscribed or purchased by 12 June 2014, in the context of a direct contractual relationship with the issuing banks. In order to receive compensation, creditors must submit the related compensation requests by 30 September 2017.
#Banks Approved decree on the Venetians that protects savers, work and businesses. A difficult and necessary rescue finally in port
— Paolo Gentiloni (@PaoloGentiloni) July 27 2017
