Here are Brussels’ somersaults (anti Italy) on the banking crises
The EU Commission has announced a "less rigid discipline for the management of banking crises, which leaves more room for the preventive or alternative use of deposit guarantee funds". Exactly what the EU Commission forbade Italy in the Tercas case between 2014 and 2015. Giuseppe Liturri's comment
Old wounds are reopening in relations between Italy and the EU relating to the management of banking crises. Yesterday we learned from the pages of Il Sole 24 Ore that the EU Commissioner for financial markets, Mairead McGuinness (in the photo), sent a letter to the top management of the ABI to announce a "less rigid discipline for the management of banking crises, which leaves more space for the preventive or alternative use of deposit guarantee funds”.
THE TERCAS CASE
Exactly what the EU Commission forbade Italy in the Tercas case between 2014 and 2015, a precedent that forced the Renzi government to launch the resolution of four banks (including Banca Etruria) on a dramatic weekend in November, experiencing for the first time the effects of the bail-in , i.e. the participation in the losses also of the bondholders and probably decreeing the end of his government. In that case, small savers whom unwary and inattentive regulators had allowed to buy potentially risky securities. This was followed by 6 months of collapse in the sector's stock market indexes and another five serious banking crises (Veneto Banca, Popolare di Vicenza, MPS, Banca Carige and Popolare di Bari).
This tsunami which, at the time, we documented step by step on this site, was incredibly defined by Laura Serafini sul Sole , "a critical phase". Not to believe your eyes. A series of events that since then have already been crying out for revenge for the manifest illogicality and denial of the most elementary common sense, even before the EU rules themselves, has been declassified as a "critical phase".
We are almost at the Stockholm syndrome, with the abductees sympathizing with the abductors. Who have also been convicted in the meantime. Because it must be remembered that the illegitimacy of the Commission's decisions was sanctioned both by a first sentence of the EU Court and by the definitive sentence of the Court of Justice.
Arrived in 2019, with the government of the time (Conte 1) which also found itself in the material impossibility (or lack of will) to request compensation for the enormous damages suffered by our banking system.
CONSULTATION BETWEEN ABI AND THE COMMISSION
Now the ABI, mindful of that disaster, has launched a preventive consultation with the Commission to point out that the new Commission directive proposal extends the resolution (and therefore the sacrifice of bondholders and depositors) also to smaller banks. For which up to now the national procedures apply, i.e. compulsory administrative liquidation. And the Commission in response highlighted that the resolution is not the only possible tool but "the reform intends to promote a more efficient use, in terms of costs, of funds financed by the banking sector to prevent crises". The lowest cost principle will apply (for savers, of course).
To this end, it will intervene to clarify the intervention criteria of these instruments. The Commission also took the opportunity to announce that it is carrying out an evaluation of the state aid framework for banks, which should be completed in the first quarter of 2024. This welcomes the need to coordinate rules for resolution and State. Precisely those involved in the brandish error of Commissioner Margrethe Vestager's Competition DG in 2014-2015. Little consolation to see perhaps accepted in a regulatory text what was sentenced by the Courts now 5 years ago.
It should be noted that all this paraphernalia is in clear contrast with the principles established by article 47 of the Constitution. But if the President of the Constitutional Court believes that EU law should prevail over national law, what are we going to tell you?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/commissione-europea-crisi-bancarie/ on Wed, 26 Jul 2023 05:34:44 +0000.