The constitutional referendum on 4 December could be decisive for the fate of Italian banks, Monte dei Paschi di Siena in primis. While numerous political scientists try to predict what the post-consultation political scenarios will be in the event of a Yes or No victory, financial analysts are predicting what the possible economic repercussions of the most important electoral appointment of the year could be.
The latest forecast in chronological order came from Moody's experts who, during a meeting with the press held in Milan, analyzed the consequences that could befall the Italian banking sector, currently grappling with the problem of Non performing loans, in case the constitutional reform does not pass.
'A no to the referendum would increase the political risk. It is an event that carries a risk to investor confidence which would make capital increases more difficult for the four weakest banks”. These are the words spoken by Edoardo Calandro, assistant vice-president and banking analyst of Moody's.
Which four lenders does the analyst refer to? Monte dei Paschi, Banca Carige, Veneto Banca and Banca Popolare di Vicenza.
“Obviously – continued Calandro – a more volatile market reacting to a referendum vote could create further problems for the plan for this rating under review with uncertain direction'”
In general, however, a no victory in the December referendum and a consequent lower confidence in Italian assets "could slow down the process of cleaning up the balance sheets from the stock of NPLs" and strengthening capital, which however is "more urgent for the banks weaker”, while the others have more time available.
Speaking in particular of the Sienese bank, the assistant vice-president of Moody's revealed that the institute's plan is "challenging". “However – concluded Calandro – there is no automatism” on the rating decisions resulting from the referendum. The result of the consultation "is a further point of analysis within a more complex situation".
