Bcc, here’s how Conte will pamper cooperative credit

6 October 20204 years ago babelfish

Majority of the government and Palazzo Chigi try to fulfill the demands and expectations of the world of the Bcc (Cooperative credit banks). What Conte said

Majority of the government and Palazzo Chigi try to fulfill the demands and expectations of the world of the Bcc (Cooperative credit banks). All the details and why

THE WORDS OF COUNT

“The banking cooperative world is obviously suffering, the signs are very evident with respect to a reform framework planned in 2016” and on this issue “we must initiate and conduct appropriate reflection”. This is the commitment of the Prime Minister, Giuseppe Conte, pronounced during the Confcooperative assembly. "I cannot promise the outcome of the reflection – said the premier – but there is the government's commitment to work together to fine-tune the critical issues and also work in Europe so that these criticalities can be overcome".

THE PROMISES OF THE GOVERNMENT

"The reform was created to strengthen cooperative credit banks from a capital point of view and strengthen their resilience, but it risks leading to excessive regulatory homologation of the banking model with constraints designed for so-called systemic banks that actually risk – now we are aware of this – to curb the disbursement of liquidity on the territory ”, Conte observed .

CONFCOOPERATIVE REQUESTS

“There are 250 cooperative credit banks present in over 2,600 municipalities. Cooperative credit cannot be asked to be a local bank without the legal and regulatory instruments it needs to perform this role in the best possible way. We ask that European banking regulations and supervision for the mutual banks be simplified and recognize these banks as less significant, in order to enhance their role as 'small and not complex' banks ", asked the president of Confcooperative Maurizio Gardini, on the day of the 40th National Assembly, adding that "the reform of the third sector and social enterprise must be completed with the notification to Brussels of the new tax regime".

THE REACTION OF FEDERCASSE

Federcasse, the federation that gathers the Italian cooperative credit banks, expresses "great appreciation" for the intervention of the Prime Minister Giuseppe Conte at the Confcooperative assembly and in particular for the passage dedicated to the mutual banks and the objective difficulty, more times reported by Federcasse, to 'fulfill the function of local banks in the best possible way in the presence of the new regulatory framework set out in the 2016 reform ″. "We thank the Prime Minister – says the President of Federcasse Augusto Dell'Erba – for the significant position taken on such a complex and delicate issue, and above all for the commitment to develop, at the government level, an adequate reflection on the need to remove those constraints that today do not allow cooperative and mutual banks to fully carry out their primary function of supporting Italian families and businesses ".

WHAT THE M5S AMENDMENT ON THE BCC PROVIDES

The government majority was already in action on the CBs. According to an amendment of the pentastellati to the August decree, the two national parent companies, Iccrea and Cassa Centrale Banca (Ccb), would be dismantled, which would become institutional protection systems (Isp) obviously with the authorization of the Bank of Italy. These systems would maintain "the same risk classification, monitoring and control processes as the member banks". Strategic guidelines, management policies and risk assumption would be indicated by the parent company, which have become the manager that "exercises intervention powers proportionate to the riskiness of the member banks, including the power to appoint, oppose the appointment and remove one or more members of the administrative bodies and control of member banks ". The same managing body would be notified in advance "of decisions of strategic importance such as mergers, demergers, equity investments and real estate, opening, transfer or closing of branches".

In this way the BCCs would maintain the little managerial autonomy they now have but would have the advantage of no longer being considered significant and therefore of losing the supervision of the European Central Bank.

THE PROBLEM OF SIGNIFICANT BANKS …

To be defined as significant banks is a considerable problem for the mutual banks, which involves all the 27 banks that were forced by the reform to merge into Iccrea and Ccb. With this operation, in fact, the cooperative credit banks have become significant – that is, significant in terms of risk – and fall within the group of large banking groups subject to the Single Supervisory Mechanism headed by the Eurotower. The paradox, however, the experts explain to Start Magazine , is that the mutual banks are considered significant only because of their membership in a cooperative banking group and this means that a small mutual bank with even only four or five branches is subject to the same rules. provided for European banking giants, with all that this entails in terms of the possibility of (not) financing SMEs, artisans and families.

… AND THAT OF SURVEILLANCE

Another decisive issue for cooperative credit banks is that of supervision which, as for non-cooperative banking groups, is assigned to the ECB. In theory, the bicameral commission of inquiry on the banking and financial system should also deal with this issue, as envisaged by its founding law (article 3, paragraph 1, letter c). The point is that "supervision is on the cooperative parent company, owned by the individual banks that express the model, and on the individual affiliates", explained Augusto dell'Erba, president of Federcasse, in an interview with Start Magazine . For the banker, on the other hand, it is important that on this front "we make use of an overall system that provides for a structured proportionality" as happens in the United States.

Corrado Sforza Fogliani , president of Assopopolari, also agrees with dell'Erba on this concept, according to which "in the European Union it happens that legislation is passed without respecting the principle of proportionality which applies – for example – to both Unicredit and territorial banks: which means enormous costs for small banks in relation to their mass of assets under administration ”.

THE PARENT COMPANY AND THE SMALL BCC

The problems are felt in particular for smaller institutions and especially for those headed by the central bank. "More and more mutual banks, especially those that have joined the cooperative banking group of Cassa Centrale Banca (Ccb) ( which participated in the Carige rescue operation , ed ), feel the need to recover their managerial autonomy (which evidently it has been lost) through the search for solutions aimed at conserving the capital resources painstakingly accumulated in the banking business without, however, removing them from the context of cooperation " wrote in Start Magazine Marco Bindelli, vice president of Banco Marchigiano and managing director for relations with cooperative credit and the parent companies (Ccb group). Moreover, the example given by Ccb involves " the risk of starting a process of hybridization and heterogenesis of the banking group which could turn from a cooperative into a lucrative one".

Finger also pointed at the Ministry of Economic Development " several times directly solicited also on these pages since March 2019, which should have issued its own decree to govern the controls aimed at verifying that the exercise of the role and functions of the two parent companies are consistent with the mutual aims of the mutual banks ".

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/bcc-ecco-come-conte-coccolera-il-credito-cooperativo/ on Tue, 06 Oct 2020 07:13:46 +0000.