What happens between the Bcc and the Ministry of Economy? The article by Emanuela Rossi
The Bccs are back in the spotlight. This time they do so through the National Council of Federcasse, the Italian Federation of BCC-Casse Rurali, and the Confcooperative bodies that have examined the decree of the Ministry of Economy and Finance on the new requirements and the new eligibility criteria for banking representatives. . A regulation that, they explain, to cooperative credit institutions can create problems in the renewal of corporate bodies. For this reason Federcasse and Confcooperative ask to integrate in the dm "the principles of proportionality and adequacy with a structural and not exceptional approach".
However, the effects of the pandemic and the new European banking rules on the definition of “default” and “calendar provisioning”, that is the calendar of provisions for impaired loans, also cause some concern.
THE COMPLAINTS OF FEDERCASSE AND CONFCOOPERATIVE
Federcasse and Confcooperative in their note highlighted how the Decree 169/2020 of the Mef on the new requirements and eligibility criteria of bank representatives "does not apply in a structured way the fundamental principles of proportionality and adequacy, accelerates approval processes and determines paradoxical effects of storage". In essence, this is the accusation, "the new rules hinder the renewal of corporate bodies and, consequently, the hoped-for increase in diversity of both gender and professional profiles and the indispensable turnover with the entry of young directors ". While sharing "fully the substantial objective of the legislators, European and national, of focusing on the constant qualification of corporate governance in the banking industry of the Union", the two organizations do not share the approach "once again only partially (or incidentally ) based on the fundamental and constitutive principles of proportionality and adequacy of the European Union ".
In essence, it is recognized that the ministerial decree, although "opportunely excludes the BCC-CR from the class of 'major banks'" and includes them in the class of "small and non-complex" banks (with assets equal to or less than 5 billion euros) in any case, "it designs a rigid system of selection of directors, with very tight meshes and with paradoxically conservative effects for small banks and, among these, especially for the mutual banks".
Federcasse and Confcooperative then recalled that "rules relating to mutuality, their distinctive feature, require you to choose your directors from among the shareholders (over 1.3 million, ed) who are mainly entrepreneurs, professionals, artisans, farmers, traders, workers , teachers with adequate experience and appropriately and continuously trained ". And in fact "the connotation of localism means that the mutual banks have an operation limited by law to the territories of settlement, which are not necessarily all located in large cities and financial centers, but rather in industrial, artisanal, agricultural, commercial production districts ".
In short, "an effect of substantial 'freezing' of the ruling class is generated, hindering the renewal of the corporate bodies, the necessary increase in diversity of both gender and professional profiles and the indispensable turnover with the entry of young directors (with experience requirements that are difficult to adapt to a board of a cross-border banking group, but oversized compared to the Board of Directors of a community bank with mutual aid purposes) ".
What would the mutual banks have expected from the national legislator? That it moves "using the opportune and adequate margins of flexibility and discretion provided and allowed by the European directives" and that takes into account "the managerial simplicity of small banks" while not comparing them, in many respects, with "entrepreneurial, managerial and organizational complexity of a large or very large bank listed on the stock exchange ".
THE APPEAL WITH THE UNIONS
Federcasse did not stop there and also called the trade unions together, together with Iccrea and Cassa Centrale Banca (Ccb) and the Raiffeisen Federation. Therefore, with the national secretariats of Fabi, First Cisl, Fisac Cgil, Uilca and Sincra-Ugl Credito, they defined a joint declaration to express "common concern" for the economic and social impacts that will arise from the European banking rules – in force from January 1 2021 – relating to the new definition of "default" and the calendar of provisions for impaired loans, or the "calendar provisioning".
"In a scenario heavily conditioned by the effects of the pandemic – they wrote – these regulations are disproportionate, inadequate and inappropriate" as they "jeopardize access to credit for businesses and households and compromise the recovery prospects of the Italian and European economy ". In particular, the mutual banks, the rural banks and the Raiffeisen banks "are recording signs of increasingly acute suffering from large segments of the population and production sectors that are traditionally resilient in times of crisis with a lower global impact and which, due to changes regulations now intervened at European level, in a general context already severely affected by the pandemic emergency, risk becoming 'bad payers', against their will and as a result of extraordinary and unpredictable events ”.
For this reason "it is necessary and indispensable to immediately proceed with specific changes and adaptations of these rules, which allow the banking industry to offer maximum support to the real economy in this phase of serious health emergency and the 'Community banks' to support reference territories in full consistency with their founding values ".
An appeal then to the creation of "an inclusive, diversified and sustainable Banking Union, with far-sighted, proportional, adequate credit rules, closer to the new needs of the real economy, families and businesses" recalling "the great contribution given, always, from cooperative and mutual banks to maintaining the social and economic system ".
THE CONCERNS OF DELL'ERBA
At the same time, Augusto dell'Erba, president of Federcasse, interviewed by AdnKronos, spoke about the Bcc, the impact of the pandemic on the banking system and calendar provisioning. “In abstract terms – he said – the effects of the pandemic on banks can be different depending on the business model, the geographic area of influence, the degree of exposure to individual production sectors, the degree of internationalization. It is not yet possible to establish at this stage whether small banks may be more or less subject to the negative impacts deriving from the pandemic ”.
Certainly, dell'Erba pointed out, "the pandemic crisis is characterized by being of a temporary and non-structural nature like that of the years 2009-2014" and in any case "the greatest risks of instability will not come from small banks but could be generated from situations of weakness of banks and medium-large groups, for which the application of the resolution mechanism appears complex, cumbersome and even uncertain ”.
According to Federcasse's number one, the new rules on bank loans “have an impact on all banks and their customers. The so-called calendar provisioning tends to reduce the management of anomalous credit to a mere bureaucratic activity and to impose predefined loss forecasts that are unrelated to the characteristics of the individual positions and the relationship between bank and entrusted customer ". Finally, dell'Erba returned to a topic that has been central to the mutual banks for years: “There is a problem of non-proportionality of the rules, of excess compliance costs for smaller banks and therefore of regulatory inefficiency – he noted -. A well-known and widely discussed problem at EU level, which generally places the overall European financial system in a position that is not competitive with the North American one ”.
THE REFLECTIONS OF FIRST CISL
In the same hours First CISL made known some reflections of the secretary general, Riccardo Colombani, on the same topic. Colombani also calls into question the reform of the cooperative credit promoted by the Renzi government. “The regulations and the new European order are aligning the Italian cooperative credit banks with the big banks without the reform, conceived and launched in 2016, having produced suitable effects. The goal of strengthening and standardizing a system fragmented into hundreds of small mutual banks, in support of individual local economies – he highlighted -, has actually turned out to be a simple subdivision into two cooperative banking groups and an Institutional protection scheme (Ips) in the province. autonomous of Bolzano; something still very distant from the initial intentions. Moreover, not even processes of exaggerated consolidation among small mutual banks would be functional to the intrinsic objective of social utility of the cooperative banking model ".
According to the secretary general First Cisl "in order to better manage the necessary review of the cooperative credit reform it is essential to involve all stakeholders, from members, associations, local institutions and, in particular, it is essential to create the conditions for female workers , from professional areas to executives, can proudly express and represent the diversity of the cooperative model, which cannot and must not be homologated to the rest of the banking system ".
For its part, “national policy must implement all that is available to it, also in terms of dialogue with the European institutions, to avoid the downsizing of cooperative credit or the already mentioned homologation. This is in order to avoid the high risk of destruction of the capillary productive capacity represented by the very numerous micro-enterprises and related employment, as well as the loss with it of the country's social cohesion ".
Colombani also appeals to the social partners, called to "redesign the system of trade union relations for the enhancement of male and female workers, who represent the identity of those values of cooperative credit and which have the burden and the honor of practicing day after day".
Next appointment, "the relaunch of national collective bargaining, including the management contract that has expired for too long" which "must represent the new beginning".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/sportellate-delle-bcc-contro-il-governo/ on Mon, 25 Jan 2021 06:48:38 +0000.