The Bank of Italy “does not enter into the merits of the share price but the procedural criteria for determining the price are within its competence. From 2001 to 2009 there were several inspections of Bankitalia in Venetian banks on the pricing procedures. The results relating to the inspections in the Popolare di Vicenza were not sent to Consob because, but it is my interpretation, it was believed that they were procedural problems not only within our competence, but also solvable by us” and because back then there wasn't a collaboration protocol that also invested equity securities. She said it Carmelo Barbagallo, head of the Bank of Italy's banking and financial supervision department, during his second hearing before the parliamentary commission of inquiry into the banking system.
Barbagallo also recalled that on the case of Pop Vicenza the inspection report was forwarded for examination by the Public Prosecutor's Office, which was then archived. The number one of the Vigilance of Via Nazionale also explained that "reporting obligations on equity securities were not governed by a protocol”, at least until 2012.
Angelo Apponi, general manager of Consob, was summoned today to a joint hearing together with Barbagallo, who has already spoken in the morning before the Commission. Both had already been heard yesterday in separate sessions. Today the two hearings have been transformed into testimonies.
“The collaboration between the Bank of Italy and Consob is continuous and intense – added Barbagallo – in recent years it has intensified and is based on protocols which rather dense sending of information and quite frequent meetings. Pursuant to a 2012 protocol, every month for all the banks in the system (over 500) we send granular data on assets, income and credit risk. Since 2013, Conosb has free access to data from the Central Credit Register, i.e. it can know the situation of individual customers. And since 2014 it has access to the data of the bank representatives”.
As it regards instead Veneto Bank, according to Barbagallo, the 2013 inspection results sent by Bank of Italy to Consob already highlighted critical issues in relation to "the determination of the price of the shares with a constantly increasing value up to 1,43 of the shareholders' equity, a value inconsistent with the current economic context and with the negative performance of the 2012 financial year and from the inspection analysis a significant portion of loans for the purchase of the shares”.
In this case, the results were sent to Consob because "there was a discontinuity in the overall assessment of the bank - continued the number one of the Supervisory Authority of Via Nazionale - Certainly the content of the November 2013 document was sufficient for Consob to take action. If then the other authority doesn't act… Then I don't know, since I'm not participating in it, if this issue has been dealt with at the level of the Bank of Italy-Consob technical committee regulated by the 2012 protocol”.
This kind of "discontinuity", on the other hand, was not recognized in the case of Pop Vicenza. However, according to the secretary and deputy of Selezione Civica, Enrico Zanetti, this is not enough to justify the unequal treatment by the Bank of Italy of Veneto Banca and Pop Vicenza. Furthermore, Zanetti points out that in the past Bankitalia had defended itself by claiming that the procedures for defining prices were not within its competence; the exact opposite of what he says today.
To these objections Barbagallo replied that he believed that in 2013 “there was a clear difference between Veneto Banca and Pop Vicenza. At the time the riskiness of Pop Vicenza was in line with that of the system, while that of Veneto Banca was much higher and much more serious irregularities had also emerged in the disbursements".
On the side of subordinated bonds owned by Venetian banks to their customers, Barbagallo suggested “prohibiting the retail placement of bonds, not only subordinated, below a certain score. In some cases it is necessary to arrive at the prohibition, the prospectus is not enough. To take this provision, a law would not be needed, it would be sufficient to find an agreement with Consob ".
As for communications between the two authorities, Barbagallo noted that Bank of Italy carries out about 250 inspections a year in banking institutions and “the results of the inspection are sent to Consob, but not all the inspection reports. Each report consists of 50 pages plus attachments and we cannot flood Consob with all the minutes. This is why we send the outcome of the inspection when we believe there are relevant profiles for the other Authority".
