Bank of Italy responds to the accusations about the alleged pressure exerted in order to favor the merger between Banca Etruria and Banca Popolare di Vicenza.
The MERGER OF ETRURIA AND VICENZA
Via Nazionale has never "asked nor encouraged nor favored Popolare Vicenza to acquire Banca Etruria". He says it clearly Carmelo Barbagallo, head of supervision of the Italian central bank during thehearing at the Commission of Inquiry on Bankse.
Not only, "the vigilance did not have any elements to oppose a priori this initiative which, if it had turned into a formal instance, would have been investigated", continued Barbagallo, explaining that when the Veneto bank, in 2014, expressed its interest in the Arezzo one, for the Banca d 'Italy “the situation in Vicenza at that time dates back to the last inspection in 2012 which showed a large capital capacity, without enormous risk. It was an average bank. Only with the "comprehensive assessment" of 2014 did we discover a different situation"
THE COMMISSIONER OF ETRURIA
Then a further clarification: the Bank of Italy did not ask for the receivership of Banca Etruria because he had refused the offer of Popolare di Vicenza for the marriage "but for the patrimonial losses, because the patrimony was zeroed". This is the answer of Barbagallo who answers the questions of a bicameral commissioner who asks him to account for the prosecutor's statements head of Arezzo Roberto Rossi who highlighted the strangeness of the alleged support of the Vicenza offer by Via Nazionale before the Commission of Inquiry.
With regard to the sanctions inflicted on the Arezzo board of directors, the official adds that it was since December 2013 that the Bank of Italy told the bank of Arezzo "think about saving yourself, integrate with whoever you like but save yourself" and after a year and a half, in May 2014, Banca Etruria's board of directors still indicates its intention to pursue the bank's independence.
THE FOUR BANKS IN RESOLUTION
On the four banks placed in resolution in November 2015 by the Renzi government, Barbagallo refers the accusations back to the sender, arguing that "the action of the Supervisory Authority was pressing". According to the official, "the irregularities were brought to the attention of the judicial authorities in a timely manner", but "the replies of the four banks were unsatisfactory" and the "supervisory authorities cannot replace the supervised entities to prevent the situation from escalating".
The official then referred to the governance of the four institutes, "was highly inadequate in all its articulations". Barbagallo specified that “the strategy of the Foundations, aimed at maintaining a dominant role, had an impact on the quality of the governance of three of these banks (Marche, Chieti and Ferrara); this has resulted in a reluctance to resort to the capital market and hostile attitudes towards aggregative solutions. The problems of Popolare dell'Etruria are no different, where the weak control of the shareholders is matched by the self-referentiality of the top management, determined to maintain conditions of autonomy even in the face of an increasingly critical situation”.
Speaking of the Government's decision to put the 4 banks under resolution, Barbagallo explained that the intervention adopted was "onerous for the shareholders, for the subscribers of subordinated bonds, for the banking system", but it served to avoid "two two much more destructive alternative solutions: bail-in or compulsory liquidation”
“In both cases the systemic consequences would have been much more serious than that of the resolution,” he concluded.
RELATIONS WITH CONSOB
In the last months of 2013, Bank of Italy and Consob had "several meetings" to talk about Banca Etruria and the inspections carried out. In detail, “on 17 December 2013 the representatives of the two authorities elaborated on what emerged from the inspection. And Consob announces that an investigation is underway for the approval of a supplement to the prospectus (on the subordinated bonds that the institution should have issued) which incorporates all the information currently available". Two weeks earlier, on 5 December, Via Nazionale had sent a letter requesting "integration with a partner of high standing".
"On 6 December - continues Barbagallo - a letter is sent to Consob which promptly summarizes the critical issues that emerged in the inspection report".
THE INTERVENTION OF THE EU
The head of supervision also explained that the European Commission decided to block the possible rescue of the banks by the Interbank Fund since it was considered "state aid". Opinion also shared by the ECB.
