The Italian Banks’ Bail-out: A Deafening Silence

What are the main lessons from the Italian bail-out of the two Veneto region’s banks ? At the European level, the bail-out is a nail in the coffin of the Bank Recovery and Resolution Directive (BRRD), as it shows that European rules for protecting tax-payers can be easily circumvented. It creates a precedent that does not bode well for future banking resolutions. It raises a serious moral hazard issue for national banks and national regulators: just invoke the magic F-word, “Financial-stability”  and the EU will let tax-payers foot the bill. Do you remember the paramount objective of breaking the bank-sovereign debt loop? It’s down the drain. The Government’s main justifications for allocating up to a point of GDP to the rescue and for heavily subsidizing Banca Intesa are very weak. a) Fears of contagion to other banks is hard to imagine: the 2 banks make about 2 percent of the Italian banking system’s assets, according to the FT. b) The need of fully bailing-out senior bond-holders is also hard to accept. Large private bond holders were not rescued in the case of the regional banks of Etruria, Marche, Chieti and Ferrara. It’s hard to imagine large investors being cheated by banks.  c) A credit crunch of SME’s due to the disappearance of credit lines could have been avoided by other market mechanisms such as securitization. d) A bank-run on deposits...

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Italian Banks: Questions of Transparency and Credibility

The details of the  plan for the liquidation of Banca Veneto and Banca Popolare di Vicenza and the involvement Banca Intesa  have not been made public. We know from the press that Banca Intesa has offered a symbolic sum (1 euro) to acquire the porfolio of (relatively low risk) asset and liabilities which do not include Non Performing Loans nor junior bonds, in a move that would not affect it’s capital nor dividend. This raises a number of questions that the Italian government, the ECB and the other involved EU supervision authorities should answer: what is the official estimate of the difference between the market and the book value of the two banks’ Non Performing Loans , a gap that will be presumably footed by tax-payers (estimates in the press range from 5 to 10 billions)? what is the official estimate of the market value of the (low-quality) asset and liabilities that will be eventually transferred to a bad bank for the government to recover part of the losses? what is the official estimate of the market value of the (high-quality) asset and liabilities that will be eventually transferred to Banca Intesa?  Does this estimate exceeds one euro, and , if so, what justifies the government subsidy to a private bank? what is the estimate of the private sector’s contribution in terms of bailed-in asset (junior bonds, shares and so on)?...

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Proportional Rules and Troika Risk

In a December 2016 post I discussed the likelihood of Italy falling back into chaotic political instability, capital flights, rising bond spreads and bank runs (TROIKA scenario). I argued that much would depend how the Gentiloni government would manage the hot potato of the new electoral rules, the troika scenario being more likely if  a proportional system would be chosen.  My initial estimate of the  troika probability was quite high, above 50 percent. In a second post  in Febrary 2017 I argued that the Constitutional Referendum and the ensuing split of the Democratic Party would further boost the Troika scenario (to 63%...

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A Studio24 – RaiNews24

Stamattina a Studio24 con il vicepresidente del Partito democratico, Matteo Ricci, con il vicedirettore del Corriere della Sera, Daniele Manca, Nicola Graziani dell’Agi , Conduce Roberto Vicaretti http://studio24.blog.rainews.it/2017/04/03/studio24-puntata-del-3-aprile-2017/...

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L’Europa a 5 Stelle

In occasione delle celebrazioni per il 60 anno dalla firma del trattato di Roma di fondazione della Comunità Europea il Movimento 5 Stelle  ha pubblicato il Libro a 5 Stelle dei Cittadini per l’Europa . Questo contiene il progetto con cui il Movimento intende “cambiare radicalmente le politiche europee” . Il documento è di agevole lettura: escludendo gli spazi dedicati ai titoli dei capitoli, si tratta di 8 pagine di cui circa 5 scritte a metà, per un totale di circa 5 cartelle e mezzo. In esse vengono affrontati i seguenti 7 temi: Mercato unico e commercio, Economia e unione monetaria, Schengen immigrazione...

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Taxi Driver 3: Prezzi e Costi (Tout va bien, Madame la Marquise)

Finalmente l’autorità Garante della Concorrenza e del Mercato ha inviato una sollecitazione alle Camere perchè provvedano a rimuovere i più evidenti  ostacoli alla concorrenza del settore dei taxi. E’ almeno dal lontano 2006, quando le dure proteste dei tassisti  romani contro il sindaco Veltroni bloccarono i timidi tentativi di liberalizzare i trasporti locali dei governi di centro-sinistra, che le vicende dei taxi costituiscono  la cartina tornasole di governi  deboli e ostaggio degli interessi particolari. Allora toccò al professor Giavazzi della Università Bocconi  venire additato come il nemico pubblico numero uno della categoria per le opinioni espresse sul Corriere. Farmacisti, notai, avvocati,...

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Taxi Drivers 2: The Sequel

Com’era prevedibile, il mio articolo sulle tariffe dei taxi in Italia non ha incontrato il favore della categoria. Alcuni osservatori, diciamo così, hanno sollevato obiezioni, più o meno ragionevoli. Cito le più frequenti. i dati provengono da una Banca svizzera (UBS) e dunque non sono affidabili (presumilmente perchè parte di un complotto pluto-giudaico-massonico a danno dei tassisti italiani). Sarebbero invece affidabili quelli fatti circolare su twitter in una tabellina prodotta da un’associazione di tassisti, che, al contrario di UBS è parte in causa, e di cui non si conosce nè la fonte, nè l’anno di riferimento, nè i criteri di...

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The “Troika Risk” and Democratic Party Break-up

The gloomy saga of Renzi’s Democratic Party (PD) is slowly but inexorably ending in a split. While it is not easy to resist the temptation to shrug this off is as yet another pathetic episode of the long history of the party’s obsessive masochism, the possible economic consequences of the “schism” should not be underestimated. In a previous post I discussed the likelihood of Italy falling back into chaotic political instability, capital flights, rising bond spreads and bank runs (TROIKA scenario). I argued that much would depend how the (then) new Gentiloni government would manage the hot potato of the...

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Paolo Manasse


Professor of Economics
Economics Department, University of Bologna

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