Join yes, but how? On the eve of the reform of the CCBs announced and repeatedly postponed by the Government, last Wednesday's conference promoted by the Capriglione Foundation and the Luiss University of Rome x-rayed the reform project presented by Federcasse, the trade association that brings together most but not all mutual banks. And he did so on the basis of an introductory report by Professor Francesco Capriglione, former professor at Luiss and manager of the legal service of the Bank of Italy, the full text of which is attached, and the subsequent round table attended by the former minister Rainer Masera and academics Mirella Pellegrini, Antonella Sciarrone Alibrandi and Marco Sepe.
All agree on the need to strengthen the mutual banks' assets, to improve their governance, to eliminate conflicts of interest and to defend and enhance their mutual nature and local roots and therefore on the opportunity to encourage aggregation processes between the mutual banks but – here is the point – it is necessary to verify whether the declared objectives are really reconciled with the tools and with the proposed solutions. According to Capriglione, the Federcasse project, which is based on the aggregation of the CCBs into a single parent company in the form of a banking spa but which we do not yet know if and how much the Government will implement in its decree, does not correspond to the shared aims of the reform and risks cause irreparable damage to the cooperative credit system.
The concentration of the 360 Italian mutual banks in a single parent company risks eliminating the mutualistic nature of the mutual banks and the centrality of the shareholder and establishing a distance between the parent company itself and the basic reality of the mutual banks which would obscure the ties with the territory, which have been always a strong point of the cooperative credit system. But, according to Capriglione, there is another risk that the centralization of the structure of the CCBs envisaged by the Federcasse project brings with it, namely that of giving life to the third largest Italian banking group but with such insufficient capital endowment and with know-how large bank so deficient as to create a giant with feet of clay by exposing it to the unsustainable competitive pressures of banks of a much higher level such as Intesa Sanpaolo and Unicredit.
What then is the solution? Capriglione proposes to favor aggregations between the CCBs in regional hubs, thus imagining better safeguarding their cooperative nature and the link with the territory. A third hypothesis was also raised in the debate, different from national aggregation and regional aggregation, and that is to let the mutual banks freely decide how to merge as long as they respect essential requirements and criteria in terms of capitalisation, total tangible assets, investment, governance and local presence. A third way that would make it possible to respond adequately to an unknown factor that weighs heavily on the entire reform, i.e. what are the alternatives that are envisaged for the CCBs that do not consider joining the single group branded Federcasse, which in turn indicates to the regarding only the obligatory alternative of transformation into a popular bank or joint stock company with the paradox of paving the way for a probable rain of newly minted small popular banks.
What is the final outcome of the reform of the CCBs, which according to Rainer Masera would have been much more appropriate to precede with a broad debate on the type of bank to be built and its relationship with the guidelines that come forward within the Community, is the future same of the local bank in a country characterized more by small and very small companies than by medium and large companies which must make us reflect.
It was Masera himself who pointed out that, while the United States are perfectly aware that the banking system cannot focus solely on the big banks, far from risk-taking, and that the system of small banks must instead be defended and valued, Europe seems moving in the opposite direction and with its abstruse, bureaucratic and bizarre banking regulation it looks like a runaway train which, perhaps unknowingly, is heading towards the destruction of small banks, including those of the German landers.
Of course, it cannot be a single country that reverses the trend of a Europe which seems to have taken on contradictory and self-defeating orientations especially with regard to banks, but, starting from the reform of the CCBs that the Renzi government has placed on the agenda, it would be time to open a wide-ranging reflection on the type of banks we want and on the relationship between banks, the financial system, businesses and savings in the Europe to come, before it is too late and irreparable choices are made.
In the banking field, small is not always beautiful or, better still, small is beautiful if it grows in a healthy way, but the news every day reminds us that, from Lehman Brothers to Deutsche Bank, a banking system made up only of giants is more than a gamble.
Attachments: Capriglione Report – 4 February 2016.pdf
