To bring Monte dei Paschi out of the storm, will it be necessary to commission it or even nationalize it at least temporarily? The idea, right or wrong, is not far-fetched and was not born in a statist mind but in that of a refined economist like Giacomo Vaciago, a long-time academic at Cattolica and often called upon to advise the Treasury or the central bank. Vaciago threw it in the interview granted on Friday to FIRSTonline, inspired by international best practices and explained it thus: “We must do as they did in Washington, London and Stockholm. Faced with such serious crises, a bank must be saved with a temporary – and I repeat: temporary – nationalisation. We must not be afraid of words nor become prisoners of ideologies: when they decided on the partial and temporary nationalization of the banks, it is not that the USA, Great Britain and Sweden suddenly went mad or became statists. Come on, let's not joke: rather than lending money with Tremonti bonds or Monti bonds to a bank that no longer knows what it is or whose it belongs to, like Monte dei Paschi, it is better to follow the more linear path through which the State enters and nationalizes the bank for a time and comes out as soon as the bank is rehabilitated and stands on its own feet. In Vaciago's opinion, the best way to start the temporary nationalization of the bank to be entrusted to Alessandro Profumo and Fabrizio Viola.
There was much talk of the receivership and nationalization of Monte during yesterday's extraordinary meeting in Siena which approved the capital increase and recourse to the Monti bond, 2 billion euros which the bank will have to repay to the State at the rate by 9 percent. And nationalization has already ignited spirits and is heating up the debate among scholars. FIRSTonline asked the likes of academics for their opinion Filippo Cavazzuti, Giovanni Ferri, Giulio Sapelli and Gustavo Visentini. Here are their views.
SAPELLI: COMMISSIONER AND NATIONALIZE TO TURN THE PAGE – Very favorable to nationalization is one of the most famous economic historians, Giulio Sapelli, full professor at the State University of Milan and a great connoisseur of the Sienese reality for having been extraordinary commissioner of the MPS Foundation about ten years ago and having drafted its new statute. He explains: “There is a general historical trend and a particular situation like that of Siena which pushes towards the commissioner and nationalisation. As in the 30s, we are faced with the bankruptcy of private individuals but above all of the bank's management policy, which in Siena has always been dominated by power groups and Masonic lodges which have prevented its correct management. Nationalizing can become an opportunity to break this perverse logic and to break the umbilical cord that binds MPS to politics but also to free Siena from dependence on Monte. However - adds Sapelli - if you change you have to do it all the way and if you need to go through a phase of receivership you have to make a clean sweep of the old and new Monte guard and rely on new managers: for Siena and Mps it could be an opportunity extraordinary release”
CAVAZZUTI: NO DEFAULT, NO NATIONALIZATION – On the other hand, Filippo Cavazzuti, an economist from the Bolognese school of Andreatta, former parliamentarian and undersecretary of the Treasury with Ciampi and then commissioner of Consob, has a completely different opinion: "But Mps - he objects - is not Northern Rock and, if one analyzes the commitments ratio- assets of the bank, it does not seem to me that Monte is on the verge of default or has a liquidity crisis. I see a lot of drama around the bank and it would be advisable for the Bank of Italy to immediately send a new delegation of inspectors to Siena to give an updated picture of the situation also in the light of the documents on derivatives which have recently been traced but, frankly, I do not see the need neither to commission the bank nor to arrive at a temporary nationalisation. Personally it seems to me that Profumo and Viola are doing a good job of rebuilding and I think they must continue".
VISENTIN: NO TO NATIONALIZATION, YES TO NEW RULES OF THE GAME – Gustavo Visentini, a lawyer and full professor of commercial law at Luiss, is also against the nationalization of the Sienese bank: “The nationalization of MPS is useless, while the possibility of resorting to the bank's receivership or not has to be evaluated: it is up to the Bank of Italy to establish whether there are or are not the conditions in relation to the consistency of the capital. If it were to get to the commissioner, it would also be necessary to identify new people to whom to entrust such a task. But, beyond the emergency, it is urgent to turn the page and change the rules of the game, leaving the ambiguities of a mixed economy to finally arrive at a market economy and a true rule of law”.
FERRI: NATIONALIZATION PROVIDED AS TEMPORARY - “Nationalizations – finally observes Giovanni Ferri, full professor of political economy at LUMSA in Rome and formerly of the Bank of Italy and the World Bank – have been used by various countries, including Western ones, and can safeguard the bank and even translate into a good investment for the state. In the case of MPS, a temporary nationalization could favor the recovery of its image, which is necessary to maintain credibility, especially with regard to depositors and to ensure that any State support takes place according to criteria of fairness and transparency. However, there are some contraindications: nationalizations are always temporary but then, especially in Italy, there is no way to quickly return to private management and public management is generally less efficient. Furthermore, political control over credit appears to be part of the problem rather than the solution. However, it seems to me that the considerations in favor of a temporary nationalization of MPS prevail, even if those against should not be forgotten".
