The controversies rage. Some savers who had bought shares or subordinated bonds of the four banks saved in the Cesarini area from the rest of the banking system on the basis of new legislation passed by the government, protest by claiming that they have been deceived as to the degree of risk of their investment. The regulators and controllers who fight to discharge their responsibilities, however to be ascertained, and involve Brussels in a controversy that perhaps could have had some foundation years ago, but which now seems out of time. The government is under fire from the opposition who ride every protest, and objectively appears to be in difficulty especially after the suicide of a pensioner who felt deceived by his bank. Now a new fund should be launched to provide welfare aid to the "weak bands" of savers who have lost their assets in the zeroing of the value of shares and subordinated bonds, risking, however, opening a new dispute with all the other citizens who for the most varied reasons they have recorded losses in their investments. In short, a great deal of fuss in which we risk losing the underlying reasons for what happened and how we can prevent similar crises from happening again in the future. In this conversation Stefano Micossi, general manager of Assonime, wants to tone down the controversy and offer a rational explanation of when it happened and what needs to be done in the future to have an efficient banking system and more protected savers.
“In the first place – says Micossi – it seems to me necessary to clear the field of polemics with Brussels which are useless and perhaps harmful. Already in the 2013 guidelines, the Commission clearly stated that bank bailouts could no longer take place with public money and illustrated the procedures on the basis of which an intervention, even if done with private money, would be classified as state aid. It was clarified that the activation of the guarantee fund on deposits, made up of deposits from banks, as initiated by a public body, would have been considered public intervention and therefore prohibited. The Italians have long tried to obtain a derogation from the Commission and when they finally realized that they would not get it, they took the path of partial application of the new "bail in" legislation which will come into force on 1 January 2016. In this way all depositors (including those with deposits exceeding 100 thousand Euros) and all ordinary bondholders were safeguarded. Not only that, but avoiding bankruptcy has also avoided having the commissioners request the immediate return of all the sums that companies or individuals had borrowed. One can imagine the upheaval that would have occurred in the settlement areas of these banks. In addition, several thousand jobs have been saved and corporate structures have been kept up, now completely restored, which will be able to find buyers in the coming months, and therefore play a positive role in financial support in their territories".
FIRSTonline – Community decisions have now been taken. Perhaps they could have been contested before, but now it is no longer possible. It might as well direct the controversy to the steps that are missing to arrive at an effective banking union, such as for example the common guarantee on deposits which is still hindered by Germany and other northern countries. Now, however, we need to clarify how this dramatic crisis of four banks came about and if there are any responsibilities. What do you think?
MICOSSI – “The new EU rules that we have accepted impose a profound change in the operating philosophy of banks, so from now on savers will have to accept the risk of their investment choices without relying on the more or less explicit guarantee that so much the State would have intervened to protect all investments. In the future there will be a diversification of the risk between the various titles of credit companies which therefore will have to aim to be credible and reliable. This will be a profound cultural change that must be promoted by the Government and the financial sector with a long, serious and effective information campaign to make all savers aware of the risks they take with their investment decisions".
FIRSTonline – This should push the banking system to adjust faster than it has in the past. It seems quite clear that among the various reasons for the collapse of many small and medium-sized banks there is also an inadequate governance system also due to local political entanglements or other pressures: don't you think?
MICOSSI – “There is no doubt that in many cases the local oligarchies have misused their management power. The reform of the cooperative banks, launched last year by the Government after more than twenty years of attempts always hindered by those local potentates, and that of the Casse Cooperative which promises to be based on the model of Crédit Agricole will be able to accelerate a transformation of the banking system in the sense of more transparent and more profitable management. More aware savers should lead to better managed banks with advantages also for the entire economic system which must be able to count on the disbursement of credit in order to grow”.
FIRSTonline – But the regulators and the supervisory authorities have nothing to reproach themselves with? Why were high-risk bond issues also allowed by banks that have already been commissioned? And above all now that the oxen have already escaped from the stable, isn't there a risk of hindering the proper functioning of the system by prohibiting the sale of subordinated bonds to all private individuals when there could very well be savers willing to risk to have higher yields?
MICOSSI - "I think a thorough investigation is appropriate to understand how these products were distributed, an investigation that must involve both the banks and the controllers so as to understand if there have been scams or if instead we are faced with regulatory shortcomings or inadequate practices by controllers. This is a fundamental step to be able on the one hand to make claims for damages and also to be able to proceed, as has been done in other countries (e.g. Spain) with the provision of welfare or humanitarian aid to savers who are victims of the system malfunction. Of course, some oddities cannot be overlooked as of now, such as for example the numerous prolonged receiverships of banks during which little or nothing was done both to get to the bottom of the cleaning up of the balance sheets and to radically change the register with respect to the practices up to then in force, such as the sale of subordinated bonds.
FIRSTonline – So is the Government's idea of creating a fund to help savers who have lost their savings correct?
MICOSSI - "Beyond the disorderly agitation of the oppositions that ride the understandable indignation of many savers who feel cheated (or worse, the macabre exploitation of personal dramas), I believe that once responsibilities have been clarified, it is right to meet the needs of many savers, being careful however not to create new general categories of "weak bands" who may require State intervention in the future for any loss they may suffer on their investments caused by market upheavals or unforeseen events. This humanitarian compensation must be strictly linked to the ascertainment of responsibility and limited to this specific case".
The resolution of the crisis of four banks CR Ferrara, Banca Marche, Carichieti and Popolare dell'Etruria has brought to light some structural weaknesses of our banking system both in governance and scale, and perhaps a somewhat accommodative practice by supervisors that needs to be promptly addressed. Perhaps it is not a question of an overall reform of the banking system as Renzi said, but a further fine-tuning of the rules is certainly needed, also in view of the entry into force of the new crisis management system. The sooner these interventions are carried out, the better the "reputation" of the banking system will be safeguarded which, as is known, bases its existence on trust which must not be affected by excessive controversies and must be restored with precise and timely interventions.
