Matteo Renzi's blitz on cooperative banks will have to be remembered as one of the most courageous and most intensely modernizing acts of his government. Therefore, the head-on opposition of Assopopolari is not surprising, which for twenty years has been opposing any real reform project but which can only blame itself for having stubbornly closed its eyes to reality and not having been able to present time a credible plan for the self-reform of cooperative banks.
The harshness of the trade association's reaction, however, confirms that the battle over the decree which abolishes the per capita vote in the ten largest Popolari and obliges them to turn into joint-stock companies in 18 months will be no holds barred and will leave dead and wounded on the field. After all, the clash over the popular banks has been going on for twenty years and so far no government has ever managed to win in the face of a very fierce transversal lobby that has been able to sabotage every attempt at reform in Parliament against all the recommendations of the Bank of Italy .
In 1998 even Mario Draghi had to give up the reform of the Popolari. In the first draft of the Tuf (the Consolidated Law on Finance, the one - so to speak - which introduced the takeover bid into our legal system) the then director general of the Treasury tried, with the support of a minister of the caliber of Carlo Azeglio Ciampi, to cancel the per capita vote of the Popolari but aroused an outcry which led him to withdraw the highly contested provision. It is to be hoped that this time it will go better and the enthusiastic response of the financial markets makes it clear that today the wind is blowing in the other direction and is encouraging the Renzi government to go all the way in its reforming battle.
THE REAL STEM AT STAKE
But what is the real stake in the reform of the Popolari and what is hidden behind the per capita vote? The answer is very simple: it is a matter of deciding whether in the major cooperative banks, which are mostly listed on the bank and which are real credit giants, should continue to lord it over what Guido Carli called the archconfraternities of power, i.e. the very powerful trade union lobbies and local policies that have always had good times and bad times in the bank, or a fundamental principle of democracy and economic transparency should finally assert itself on the basis of which shares are not weighed but counted.
The substantive and methodological objections to the reform raised by Assopopolari and supported by trade unions and politicians who often do not know what they are talking about or are only concerned with defending the status quo or are instrumentally opposed to any move by the Renzi government (as revealed by the emblematic reaction against Camusso and Fassina) are unloaded guns, but they shouldn't be underestimated, because they can cloud ideas and hinder the path of change. Let's see them one by one.
METHOD OBJECTIONS
Assopopolari and its supporters complain about the use of the decree for a matter which, according to them, does not have the conditions of "necessity and urgency". But in 92 the transformation in one night of Iri, Eni, Ina and Enel from management entities into joint stock companies did not take place with decree n. 333? And wasn't it the first government of that fine constitutionalist Giuliano Amato to do so?
With all due respect to the army of lawyers, it doesn't take long to understand that the reform of the Popolari is a highly flammable matter, which Consob is also investigating, not by chance, and that the times in the launch of the provision must necessarily be fast so as not to fuel stock market raids on the wings of insider trading and insider trading.
But there is also a political reason which obliged and compels us to act quickly: the importance of giving the markets and the international community the signal that even in the face of totems and taboos, music in Italy has finally changed, as has already happened for the labor market and how it will have to happen for the public administration, for the reform of the justice and for the fight against crime and for many other aspects of a country that needs to be profoundly reformed.
Beyond the effects that the reform may have on the banking structures and on the cases most at risk (from Mps to Carige), the urgency of the decree is all here and there will be no crooks who can cancel it.
THE FIVE UNSUSTAINABLE MERIT OBJECTIONS
But it is on the criticisms of merit of the reform of the Popolari that it is worthwhile to concentrate the reflection. The main objections to the abolition of the per capita vote (one person and one vote regardless of the number of shares owned), which is the real heart of the reform, are essentially five and they argue that, in doing so, the decree kills economic democracy, cuts ties with the territory, puts credit to businesses and households at risk, lends itself to the colonization of cooperative banks, undermines a virtuous banking model.
CAPITARY VOTE AND ECONOMIC DEMOCRACY
Politics and economics are not the same thing. What is democratic in politics (universal suffrage that puts everyone on the same level and allows everyone to vote with equal rights) is not necessarily democratic in economics and finance. The per capita vote, which currently exists in cooperative banks and cooperative credit banks, makes sense - and in fact the reform distinguishes between large and small banks - in small realities where everyone knows each other.
The Government's choice to maintain the per capita vote in the small cooperative banks and in the CCBs is sacrosanct, but in the large cooperative banks, those with assets of over 8 billion euros and which in most cases have freely decided to be listed on the Stock Exchange, the per capita vote is a contradiction in terms that cries out for vengeance. Why shouldn't the rules of the game that apply to all the other companies listed on the Stock Exchange, which are in fact be spas, apply to the large cooperative banks, to the detriment of investors?
In large companies, shares are counted and not weighed and democracy is based on the number of shares owned and on the size of the risk capital of individual investors. Why then so much hostility to the abolition of the per capita vote? Reason is there for all to see and it is a reason of pure power. It is enough to see how the corporate assemblies of the large Popolari work with the loads of camel troops organized by the professionals of power - which from time to time can be the internal unions, the local bosses or self-referential groups - which the per capita vote encourages by suggesting a consensus gathering which is totally independent of the size of the equity investments made in the bank in question.
With the per capita vote, the ras of the Popolari win (not to be confused with the top managers who in many cases are excellent but who are themselves victims of the current system of power) but certainly not economic democracy. They are the ones who then decide - often without any respect for merit - the careers within the bank, the granting of credit, the link with the territory. But here is the time to understand.
BANKING MODEL AND LINKS WITH THE TERRITORY
Is a banking system wise that entrusts the granting of credit not to creditworthiness but to the political or trade union consensus that supports the balance of power at the top of the large cooperatives? Defenders of the status quo often argue that by canceling the per capita vote, a virtuous banking system is undermined. But is it really so? It doesn't seem like it. What about the scandals or cracks that over the years have accompanied Giampiero Fiorani's Banca Popolare di Lodi, or previously the Banca Popolare di Novara, or the cases of corruption and the arrests at the Popolare di Milano or the masonic maneuvers around the Bank Popular from Etruria? The story goes that the current model of cooperative bank, precisely because it favors self-referentiality and collusion with political and trade union power, is anything but a virtuous model and it is time to reform it, as the Bank of Italy suggests from years.
As for the links with the territory, it would be advisable to avoid misunderstandings. What does link with the territory mean in an area with a high mafia or criminal intensity? You don't need to be Einstein to understand that the bond with the territory cannot be blind and cannot be passive. A true banker must know how to select the applications that come from the local area and not collect them all indiscriminately, because some deserve credit and some don't. A bank must know how to say both yes and no, depending on the case. And there are those who fail to see how modern governance, based on overcoming the per capita vote in large cooperatives, encourages transparency, efficiency, profitability and the correct selection of credit.
THE COSSAKS AT THE GATE
Finally there is the little story of the presumed colonization to which the reform would expose the Popolari. Are the Cossacks at the gates of the banking system again?. It is a refrain that we have already heard at the time when the former Governor of the Bank of Italy, Antonio Fazio, who not by chance had been seduced by a banker who was nothing short of nonchalant like Fiorani, preferred the "cunning people of the neighborhood" to the European partners for Italian banks that needed to strengthen. Then the French of Bnp-Paribas arrived in Bnl, which was the litmus test of that period, and it certainly cannot be said that employees, customers and savers of that bank have reason to complain about it. On the contrary. There was no cataclysm at all. Also because the Bank of Italy always supervises acquisitions and the arrival of foreign capital in Italian banks, in agreement with the ECB, and this is a guarantee.
On the contrary, the reform decree can facilitate mergers and aggregations between popular banks and between these and other credit institutions (Mps and Carige in the lead) in order to strengthen them and make them more efficient. Precisely the greater agility of cooperative banks will end up limiting the incursions of foreign partners into our banking system. But if, under the supervision of the central bank, new foreign capital and new foreign banks arrived at a time of difficulty for the world of credit, it would certainly not be the end of the world but, on the contrary, a sign of renewed confidence in Italy which only incurable provincials could deny it.
