“The Monte dei Paschi scandal? It is the mirror of Italian paradoxes and anomalies. A bank that rigs its balance sheets, auditors and controllers who don't notice it, the Treasury minister who can't find anything better than shooting at the Bank of Italy and political propaganda who speculate on the case before all the real responsibilities are actually ascertained. It's a bit like if, after a robbery, instead of arresting the bandits, someone proposes to arrest the commissioner because he didn't prevent it. Don't make us laugh. Is it ever possible that we always have to do worse than the others? Rather, let us try to shed full light on the Mps scandal quickly, but without allowing ourselves to be seduced by either Grillo or Grilli. And capitalizing on international best practices in cases of banking crises”.
Faced with the MPS cyclone Giacomo Vaciago, a brilliant and often counter-current economist as well as a professor of monetary policy at the Catholic University of Milan, is a river in full flood. Let's hear it.
FIRSTonline – Professor Vaciago, the Mps case is getting bigger by the hour and the collapse of the stock on the Stock Exchange speaks for itself: what are, in your opinion, the first reflections and what things to do as soon as possible?
VACIAGO – It seems to me that in these cases the international experience gained in these years of crisis suggests at least four firm points. First: when a bank, especially a large one, goes into crisis, it must be saved without ifs and buts. Woe to let it fail. The only time when, on 15 September 2008, the opposite was done with the bankruptcy of Lehman, the whole world paid the price, because the financial crisis from limited to subprime mortgages suddenly became systemic. So Mps must be saved at all costs, but in the right way.
FIRSTonline – And that is how?
VACIAGO – As they did in Washington, London and Stockholm. Faced with such serious crises, a large 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 even knows what Monte dei Paschi is like, it is better to follow the more linear path. That is to say: the state enters and nationalizes the bank for a certain time and exits as soon as the bank is rehabilitated and standing on its feet.
FIRSTonline – But nationalizing Monte dei Paschi today would be a bit like making a bundle in Siena and devaluing the enormous reclamation and reconstruction work that Alessandro Profumo and Fabrizio Viola have done in recent months: do we want to throw everything away?
VACIAGO - On the contrary. Nationalizing does not mean denying the quality of the work of the new guard. The Government could very well appoint Profumo and Viola extraordinary commissioners of Monte.
FIRSTonline - Professor, the government has resigned and we are in the middle of the electoral campaign: are you fully empowered to nationalize MPS and appoint commissioners?
VACIAGO – This is an important aspect but it also offers the opportunity to recall the third point which should inspire the management of the Monte crisis. What an indecent sight to see Treasury Minister Grilli attack the Bank of Italy and what a squalor political speculation. What image are we giving of Italy to the world on this occasion? We risk suddenly losing all the international credibility recovered in the last year. Is it possible that the ruling class of this blessed country does not understand that, when the house burns down, teamwork is mandatory? The accounts will settle later, but now we need to square off. When they bailed out the US banks, the White House, the US Treasury and the Fed
they moved in perfect harmony. Same in Great Britain. Only we never learn anything.
FIRSTonline – So, you say: save Mps, temporarily nationalize it and team up. Right?
VACIAGO - Yes, but there is a fourth point which is no less important.
FIRSTonline – What would that be?
VACIAGO - The immediate assessment of all responsibilities, but starting from the head and not from the tail. When there's a bank robbery, the superintendent doesn't arrest him because he didn't prevent it: first of all, the bandits are arrested. Or not?
FIRSTonline – Are you saying that the Bank of Italy – unlike what Tremonti and Grilli think – has no responsibility and that it could not have known what was really happening in 2009 and 2010 in Siena?
VACIAGO - We'll see about this. I don't want to make uncritical and preventive defenses of Via Nazionale, which doesn't need it. But you can't do justice to a kilo. First of all we need to understand what really happened in Siena: is the case of Monte dei Paschi the same or not as that of Parmalat? Was there fraud and false accounting? Who are the material managers? The management or also the auditors and statutory auditors? Was there sloppiness or connivance? As for the Bank of Italy: were there inspections in 2009 and 2010 and what conclusions did they arrive at? These are all questions that still don't have a precise answer but that they will have to have it very soon. Justice must take its course without looking anyone in the eye. But beware of fuss and Italian pasties.
FIRSTonline – In a normal country what would have happened?
VACIAGO – Last Monday, having collected all the information, the Minister of the Treasury allegedly made a decision and communicated it to the markets. This is how they do it in normal countries: when there is a problem, there is a government that solves it.
