The deadline for concluding the process of the cooperative credit reform, in the internal part of the system BCC (self-reform) and external (deeds of completion of the Government and Bancaditalia) will be the month of September. We want to believe that this is indeed the case, given that the nine months so far spent searching for solutions to the problem of system transformation have been neither painless (due to the emergence of rifts in the movement) nor risk-free (with some behavior inspired by moral hazard to support the role of reform pole); circumstances, moreover, which are not yet considered completely outdated.
Any consideration on the subject must start from the point that, despite the serious structural problems that have been known for some time, there was, guiltily and up to the government initiative, no project aimed at their resolution and that this lack, in addition to being a problem in itself, has then it gave rise to proposals, of different specific value, which certainly did not help to clarify the terms of the question and to quickly find the right balance.
In recent weeks, of the six or seven hypotheses that have appeared in the media, sometimes inspired to satisfy reformist ambitions rather than to broaden the range of options that are actually practicable, it seems that (subject to the autonomy that everyone seems willing to acknowledge to the Atesino world) they have remained field that of Iccrea Holding/Federcasse and that of Cassa Centrale Trentina, protagonists of a historic and so far unrecomposed dialectic, not always aimed at the general interests of the movement.
How should the comparison between the two positions take place, given that in the model to be built there do not seem to be substantial legal and legal differences Corporate governance, with a holding company at the head of the new configurations and a cohesion pact with cross-guarantees among the participants? One of the most important arguments is of an ontological nature, i.e. whether the resulting system at the end of the transformation should be One or Bino. In economic terms, the question is whether a monopoly or a duopoly situation is better, for the purpose of a competition that is useful for the fate of the Italian BCCs and their customers.
The differences of overall size in terms of number of members (about 200 for Iccrea against 90 for Cassa Centrale), relative size of the individual components (Trentini would aggregate above all small entities) and coverage of the national territory (again for Trentino, partial and patchy leopard print) say that the two Groups would operate on industrial and market bases that are hardly comparable to each other.
So between the two, there would probably be competition in name rather than in fact. Unless the objective of reducing this gap induces the minor grouping to adopt moral hazard behaviours, for example by offering the services of their complementary structures (IT, insurance, professional) at ever lower prices to attract new customers, reducing in the medium end their investment opportunities, for example in technological innovations. Which would end up worsening their competitive abilities. Nor is it certain that any aggressive behavior on the price front can be equally distributed among all members, being able to favor some to the detriment of others. Signs in this sense can already be seen in the offers of that group in favor of banks other than the BCCs (small Popolari and Spa), which have become of sudden interest, to which it seems that particularly advantageous commercial treatments are already being reserved.
And, when the prices of services become detached from cost factors, it is easy to assume that this translates not only into behaviors that distort competition, but even into factors of instability, given that, with the objective of dimensional growth, a part of customers are forced to bear the discounts applied to others. Furthermore, a better treatment in favor of subjects other than one's own institutional adherents can produce a vulnerability to the cooperative spirit in the name of which one acts. Another argument pertains to the ability to mobilize resources to give the cohesion pact which is intended to be the foundation of the Mutual Banking Group the necessary capital strength.
And the starting levels cannot leave you indifferent. Assets of Iccrea Holding 2015: 1,8 billion euro, assets of Cassa Central Banca: 220 million. The first ten/twelve CCBs, taken individually, have, unless they are mistaken, assets higher than the latter figure. Concerning this significant difference, we must recognize that Cassa Centrale is aware of its insufficient strength, to the point that it itself estimates that, in order to form a Group, it will need to raise its assets to 800 million/1 billion euro. Since we have not found in any official document what the sources of these occurrences might be, except for the generic reference to the market, one would think that the resources must largely come from the participating CBs themselves. As if to say that to best guarantee everyone, the contributions, to be multiplied by a good four or five times compared to the current amounts, must be provided by the members of the cohesion pact themselves, so that they can in turn be guaranteed by the parent company and by the relationships of legal solidarity to be established between them.
Among other things, some of the most significant BCCs of this possible aggregation in terms of size have been affected by crises that have not yet been resolved in recent years, which have represented a financial commitment of a size hitherto unknown in the centuries-old history of the movement. Finally, there is the question of the two different banking supervision regimes to which, at present, the two groups must submit: that of Iccrea Holding to the European supervision of the ECB, being counted among the top 15 Italian banks at systemic risk, the other than the national one of the Bank of Italy, regimes which, although aligned, cannot fail to have differences (for the smallest one think, for example, of the application of the principle of proportionality of the regulation), making it more difficult the objective of the leveling the playing field.
From the foregoing it seems possible to draw the conclusion that from such a duopoly it is difficult to derive general advantages for the CCB system and for the customers of their banking services. As a corollary, it follows that any other smaller grouping of cooperative banks would bring even smaller benefits. Assuming that the reasoning in favor of a single cooperative banking group has, as we believe, its own foundation, the serious deficits currently present in this project must not be underestimated.
At a national level, which in principle responds to the need to govern a highly fragmented system as a whole through the devolution of important strategic and control functions to a Parent Company, the issue of consolidating the weaker components cannot be extraneous, an inevitable step to give substance to the reform. Instead, it seems that, compared to the first discussions, the question receives a more subdued emphasis. In our opinion, it would be wrong to cultivate the illusion that CCBs of any asset and operational size can remain on the market, without negative effects on final consumers, just because they are placed in the context of the group.
A serious merger project must then be accompanied by an investment plan for technological and business renewal, which takes note of the inadequacy of responding to the needs of modern banking services by local communities, to which the mission of the mutual banks naturally refers . The area in which to operate is vast, but precisely for this reason full of suggestions, in order to promote the effective relaunch of the cooperative component of bank credit in Italy. As with any other renewal process, the final question to be asked unambiguously concerns the adequacy of the top bodies of the Movement to guide these inescapable and complex institutional and industrial steps. This question also extends to the managerial component for the organizational problems closely connected with such a large audit project. And in all this we perhaps encounter the real problem to be solved. But we don't want to get into the thorniest of topics.
