For Veneto Banca and for Banca Popolare di Vicenza "the bail-in is an excluded hypothesis". Economy Minister Pier Carlo Padoan said so as he left the Public Administration Forum. “We are working on the European procedures – continued Padoan – There is no liquidity problem. We need continuous monitoring of the situation and we hope to arrive at a consolidated solution in the short term".
In the morning the minister met the top management of the two Veneto banks. At the end of the meeting, the Treasury issued a note underlining that "in terms of liquidity, Banca Popolare di Vicenza and Veneto Banca have all the necessary public guarantees" and that "the Government is committed to ensuring that the solution is defined in quick times".
The ministry also explains that, "with reference to the meeting that took place yesterday in Brussels between the Italian authorities and the European authorities with the participation of representatives of the two banks, it was one of the many steps envisaged by the usual technical interlocution contemplated for these cases. The dialogue with the European authorities continues, with the common objective of agreeing on the solution that guarantees the stability of the two Veneto banks and fully safeguards savers, in full compliance with European rules".
The Treasury obviously throws water on the fire also to exorcise the bank run, but – according to rumors – yesterday's meeting ended in complete failure. The European Commission does not back down an inch: to allow the rescue of the two institutions with public funds, it is asking for another billion euros to arrive from private individuals, resources necessary to cover new write-downs on non-performing loans.
At the moment it seems impossible to find private investors willing to commit a similar figure for the Veneto banks. Faced with the stalemate, Banca Popolare di Vicenza received from the Ministry of the Economy the communication that the decree with the provision for the granting of the State guarantee on further bond issues for an amount up to 2,2 billion euro has been registered in the Court of Auditors.
In light of this, the Bank has started the preparatory activities necessary for the subsequent issue of the guaranteed securities which will contribute to strengthening the liquidity profile of the group, increasing its counterbalancing capacity. The application for the state guarantee on the issue was presented on 23 March.
The objective of this provision is probably to put pressure on Brussels, gaining time and suggesting that – also in view of the elections – the executive will leave no stone unturned. Also because, in the event of bankruptcy, the costs for the Treasury would be very high.
Meanwhile, the Boards of Banca Popolare di Vicenza and Veneto Banca have been convened for tomorrow to take stock of the situation.
