The inspectors of the ECB were not "better" than those of the Bank of Italy in discovering the irregularities on the two Veneto banks. This was stated by Carmelo Barbagallo, supervisor of via Nazionale, in the hearing before the commission of inquiry into banks. At a time when Bankitalia's supervisory work is more than ever in the spotlight, Barbagallo tried to reject any criticism of the management of via Nazionale and drew attention to the first inspection of the two Venetians which started in November 2014 , immediately after the transfer of supervisory powers to Frankfurt.
It was Bankitalia, continues Barbagallo, that realized that the recapitalizations made by the two Venetian banks to fill the shortfall they were irregular, because they were largely financed by the purchase of treasury shares not reported to the Supervisory Authority. Via Nazionale at that point reported the problem to the ECB Supervision which in the meantime left.
Not to mention that the administrators of the two Venetian banks "have repeatedly withheld important information from the Supervisory Authority - added Barbagallo - whose requests they have deliberately disregarded". Via Nazionale even without the investigative powers "promptly reported the irregularities to the judicial authority with which the interlocution was continuous and open, like the collaboration with Consob".
Barbagallo explained that "kissed" operations have no longer been prohibited by law since 2008 provided they are not counted in the regulatory capital. A complex analysis was made to identify them, made even more difficult by the fact that Bank of Italy does not have the powers of the judicial authority, such as the ability to carry out searches, seizures or interrogations.
The two banks had "serious conduct" on these issues but "the factor that more than any other determined the reduction of assets was the deterioration of credit quality - Barbagallo said again - at the end of 2016 the impaired of the two banks exceeded 18 billion and amounted to 35% of loans for BPVI and 39% of loans for Veneto Banca against a system average of 17%. With regard to the disbursement of credit, the Supervisory Authority has repeatedly stigmatized management shortcomings and sanctioned incorrect conduct, but it is not allowed to exercise managerial functions in the disbursement of credit”.
The critical issues that have emerged for the two Veneto banks are ultimately attributable to "the inadequacy of their corporate governance and, in this context, to the self-referentiality of management – concluded Barbagallo – The weaknesses have been grafted onto the recession and loans disbursed lightly or in conflict of interest have brought the two intermediaries close to bankruptcy”.
Defense across the board also with regard to the practice of the so-called "revolving doors". Barbagallo specified that "the Bank of Italy neither encourages nor wishes that its employees be hired by supervised entities", but even when this happens "it does not affect the correct performance of supervisory functions". The reference is to the three former exponents, including a senior manager of via Nazionale, hired by Popolare di Vicenza. Barbagallo recalls the ethical code of the Bank of Italy which has set time limits for the passage to the private sector of the men of Palazzo Koch.
Barbagallo finally denied that Bankitalia was pushing to make the Popolare di Vicenza of the former banker Gianni Zonin, today under investigation by the judiciary, the pivot of banking mergers, from Banca Etruria to the Apulian banks, but in Vicenza as in Montebelluna everyone knew that Via Nazionale saw the merger between Pop Vicenza and Veneto Banca is welcome.
