The title Ps remains suspended but the story of Siena continues to hold court in Piazza Affari, where all the bankers travel in the red at the end of the morning.
The climate of uncertainty is still linked to thecapital increase of Montepaschi, after the European Central Bank asked the Italian state to increase the amount of public intervention from five to 8,8 billion euros. According to the latest rumors, negotiations are underway between the Gentiloni government and Frankfurt to revise downwards this figure which, however, to be definitively reassuring for the markets, cannot go down much.
At the moment, however, the required capital requirements lead to an assessment of the share to be paid by the public coffers around 6,6 billion. Of these, 4,6 will be employed to report the capital of MPS at the required levels from ECB supervision (bringing Equity Tier I to 8%), while the another two billion (2,16 to be exact) will serve to protect the 40 retail investors who had the bank's subordinated bonds in their portfolios.
These bonds will be compulsorily converted into shares, which the state will buy from small savers giving them in exchange more secure bonds that will mature on May 15, 2018, like the original subordinated ones, guaranteeing 100% of the initial investment. So no loss.
On the other hand, the story is different for the institutional investors holders of subordinated bonds, which in the conversion into shares will lose 25% of the nominal value of their investment, equal to around 2 billion overall.
For analysts of Equita Sim, "the recapitalization must be such as to remove any doubts about the solvency of the third largest Italian bank" and therefore the amount of the operation cannot be much lower than that requested by the ECB.
Meanwhile, the finance ministry reiterated that the 20 billion euro fund is sufficient for all institutions. A statement he does not agree with Standard & Poor's, according to which the resources contained in the recent bank-saving decree will not be enough to restore the entire system.
Lastly, according to Il Sole 24 Ore, the resolution authority requested another two years of contributions to the National Resolution Fund (the Bank of Italy) for the rescue of Banca Marche, Popolare Etruria, CariChieti and CariFerrara. This is 1,5 billion euros to add to the 2,35 billion already requested last year at the end of November. However, it is not said that these sums will have to be advanced immediately by the credit system because there are two years to do so, as the decree on MPS provides.
