Bicameral commission of inquiry or commission of inquiry into the crisis of banks and savings? And exactly to do what and in what times? The bill put forward in recent days by Pd senator Andrea Marcucci seemed to pave the way for the commission of inquiry which, unlike the commission of inquiry, has powers equal to that of the judiciary, but in the press conference at the end of the year the premier Matteo Renzi, accepting the invitations to prudence from the Head of State, has reopened the game, deferring to the decisions of Parliament. Bruno Tabacci, president of the Democratic Center, is a deputy and political leader who understands parliamentary investigations having promoted and chaired the commission on banks, Cirio and Parmalat bonds in 2003-4 which led to the savings reform of 2005. FIRSTonline interviewed him to ask for his opinion on the matter .
FIRSTonline – Honorable Tabacci, Prime Minister Matteo Renzi, in the press conference at the end of the year, left the choice between a commission of inquiry or a commission of inquiry into the crisis and the rescue of banks and the state of the Italian banking system of the Last 15 years: What will you and the Democratic Center choose and why?
TOBACCO - I prefer the Commission of inquiry because it has a more parliamentary profile and can usefully collect and update the documentation material and the reform proposals produced by the commission of inquiry into banks and savings which I had the honor of chairing in 2003 and 2004. Furthermore, and this is no small thing, an investigative commission would avoid hindering the work of the judiciary and the independent Authorities who must continue their activities without interference from politics, accepting the positive invitation of the President of the Republic Sergio Mattarella to ascertain the responsibilities of the crisis of the four banks that were saved by the Government but without overlaps and conflicts with other institutions.
FIRSTonline – In essence, what objectives should the committee of inquiry have if Parliament opts for this choice?
TOBACCO - Ascertain what has gone wrong in the Italian banking system and in the surveillance activity over the last 15 years, verify the state of implementation and the adequacy of the reform made in 2005 on the protection of savings, put forward new reform proposals to strengthen the controls and powers of Consob and the Bank of Italy and to better protect the savings of Italians. Precisely the results of the previous survey allow today to say that we are not starting from scratch but that the reforms need to be improved because many of the problems that have emerged with the four banks in crisis are in part similar to those that exploded with the scandals of the Cirio bonds and Parmalat bond.
FIRSTonline – In what sense?
TOBACCO - I am thinking above all of the inadequacy of the controls. In the Parmalat case, the parliamentary investigation at the time discovered that no less than seven levels of control had failed, including those within the Collecchio group and those held by the market surveillance authorities. Today I read that in the case of Banca Popolare dell'Etruria e del Lazio the key decisions were taken by a sort of shadow committee which anticipated the decisions of the board of directors and put the whole chain of internal and external control of the bank before the fact accomplished. It is a question of starting from there and verifying what has not worked and what needs to be done to improve the governance of the banks but also to strengthen the supervisory and control powers of Consob and the Bank of Italy.
FIRSTonline – But so far what is your opinion of the action of Consob and the Bank of Italy in the four cases of banks in crisis?
TOBACCO - The parliamentary investigation will have to serve to clarify these fundamental aspects as well, but I was struck by the fact that Consob judged the Stock Exchange movements of the shares of the cooperative banks in the week preceding the reform decree by the Renzi government as "strange" and in particular the growth of the 65% of Banca Etruria shares. Consob was not supposed to investigate these "strange" movements and what has it done in recent months?
FIRSTonline – And what are your thoughts on the activities of the Bank of Italy?
TOBACCO - I state that it would be self-defeating to delegitimize the Authorities that supervise the financial market and that this should absolutely not be the objective of the parliamentary commission because otherwise we would risk undermining savers' confidence. But everything that needs to be clarified but clarified without delay. One cannot fail to recall that on 11 February 2015, only 18 days after the sacrosanct reform of the Popolari, the Ministry of the Economy, on a proposal from the Bank of Italy, dissolved the administrative and control bodies of Popolare dell'Etruria and placed it in extraordinary administration. At the same time, Consob suspended the stock on the Stock Exchange. The inspection of Etruria had been launched in November 2014 by the Bank of Italy, which had already inspected it in 2013 and had asked the bank itself to find a buyer. I mean that if the Government had been informed, or had been adequately informed, it could have avoided including the Banca dell'Etruria in the 2015 reform decree of cooperative banks.
FIRSTonline – In its conception, the task of the parliamentary inquiry commission therefore seems to ascertain responsibilities and errors in order to quickly continue the path of reforms on banks and savings started in 2005 but remained incomplete: is that right?
TOBACCO - It's exactly like that. We must not lump all the herbs together and we must distinguish the banks that have been characterized by "mismanagement" from the complex of the Italian banking system, which is and remains solid and which has had to take on the not easy task of supporting a productive system crossed by the worst economic and financial crisis of the last century. As for the Supervisory and Control Authorities, Parliament would do well to evaluate any instrument that could strengthen them in the interest of the stability of the system and of savers. I am thinking above all of the need to strengthen the supervision of local banks which often, due to their size, are directly in charge of the Bank of Italy rather than the ECB and which represent a crucial link in the banking system.
FIRSTonline – To avoid delays and inconclusiveness, don't you think that the commission of inquiry should have a very clear mission right from the start?
TOBACCO - Yes, I think that times and rules of engagement must be clearly defined in the deed of incorporation. Six months of time is enough and more for an in-depth parliamentary investigation into banks and savings, precisely because we are not starting from scratch. To this I would add two months to elaborate a final reform text of the investigation. In other words, if the Parliament begins the investigation in the spring, it must make an absolute commitment to work night and day to finish work by 2016 and present its reform proposal to the Chambers and the Government at the beginning of 2017 in so that there is enough time to approve the new rules within this legislature.
FIRSTonline – In addition to strengthening the supervisory and control powers of the Authorities, don't you think it should be made clear immediately also by law that the retail sale of financial products that are too risky and difficult to understand such as subordinated bonds must be prohibited?
TOBACCO – Certainly yes, I take it for granted, even if we need to imagine alternatives so as not to reduce bank credit to households and businesses or make funding costs too heavy. In any case, subordinated bonds, which are similar to risk capital, should be reserved for institutional investors only.
FIRSTonline – There remains a problem for banks and for savings that no commission of inquiry will be able to solve on its own and which concerns relations with Europe, with an eye to the bad bank and European deposit protection: according to you, Prime Minister Renzi Was he right to vigorously open the European battle?
TOBACCO - He has done very well, even if he has to find alliances and make himself available for the necessary political compromises to bring home the results. Two hundred billion bad debts are a ballast due to the crisis of companies that today prevent banks from supporting the economic recovery as necessary. But no less essential in times of bail-in is the European guarantee on bank deposits at least in the countries that are part of the euro area: it is in the agreements that form the basis of the banking union and it is a crucial step, as Mario recalled Draghi, to advance Europe. The commission of inquiry alone will not be able to solve problems that have a European dimension but it can certainly give impetus to the action of the Parliament and the Government so that they make Italy's weight and voice decisively heard at the European table.
