Visco (Bankitalia) tugs M5S and Nagel (Mediobanca) on Npl, Mps and Popolare di Bari
What the governor of the Bank of Italy, Visco, said yesterday with indirect references to ECB rules on NPL (criticized by Nagel) and government statistic projects on Mps and Popolare di Bari
“Continue to reduce impaired loans also by using the way of restructuring the exposures of companies classified as unlikely to pay, with the aim of increasing the probability of a return to performing”.
“The experience of public banking management has often been characterized by serious inefficiencies in the resource allocation processes”.
These two sentences pronounced yesterday to the ABI executive committee by the governor of the Bank of Italy, Ignazio Visco, are in fact two slaps to projects and requests coming from politics and banks.
The slap on public banks is in fact addressed to those – especially the 5 Star Movement – who have long been longing for a public bank for SMEs and the South, in particular.
Yet beyond the intentions or aims of the pentastellates, at the moment there are in fact two banks that are directly or indirectly controlled by the state: Monte dei Paschi di Siena which sees the Treasury in the shareholding with about 68% and the Banca Popolare di Bari almost wholly controlled by Mediocredito centrale (Mcc) which is owned by Invitalia, a holding 100% controlled by the Ministry of Economy.
Journalistic reconstructions assert that Visco's criticisms are directed both at the public bank project for SMEs by Mps and at the state-driven southern bank starting from Banca Popolare di Bari.
But Visco – at the executive committee of the banking association chaired by Antonio Patuelli – has essentially hit the bankers too.
In recent days, with a papal papal parliamentary hearing, the managing director of Mediobanca, Alberto Nagel, has raised without too many paraphrases what he believes – and also according to all bankers who prefer more diplomatic tones – is an "atomic bomb", that is the ECB rules on the devaluation of impaired loans.
The calendar provisioning of the ECB, which requires the progressive devaluation of non-performing loans up to 100% in three years, is "a wrong rule" and should be revised: "applied in the post Covid is like an atomic bomb" and would determine "a disaster in the budget of banks, not just ours, ”Nagel said in recent days, during the hearing at the parliamentary commission of inquiry on banks, on the application of liquidity measures. ( HERE THE COMPLETE ARTICLE ON NAGEL'S HEARING ).
Visco is not of the same opinion. In the great uncertainty that weighs on the economic trend and the developments of the health crisis – the governor of the Bank of Italy said yesterday – Italian banks must not let their guard down and "continue to reduce non-performing loans also using the restructuring of the exposures of companies classified as unlikely to pay, with the aim of increasing the probability of a return to performing ».
In his speech dedicated to the perspectives of the banking industry in the new context of the pandemic, and in the subsequent answers to the questions asked by the audience of bankers who asked for a change in EU and ECB regulations on the handling of non-performing loans given the Covid-19 crisis, Visco – Il Sole 24 Ore stressed – invited the institutes to use the possible flexibility. "All banks – he said – must equip themselves with suitable tools to identify in time the increase in the vulnerability of debtors, in particular those who have joined the moratoriums".
European regulators can be asked for extra attention – was his reasoning, according to the summary of the Confindustria newspaper – but it must also be taken into account that the new accounting on NPL flows and the so-called "calendar provisioning" which will impose provisions from January faster banks to fully cover both unsecured (three years) and guaranteed (seven to nine years) NPLs are the result of intense negotiations that today is not easy to question.
The message in essence of the number one of Via Nazionale? "Do not count on a change in the European calendar provisioning rules to reduce credit adjustments, proceed with the provisions and, if necessary, get ready to recapitalize the banks", summed up Alessandro Graziani of the newspaper directed by Fabio Tamburini: in short, "Bankitalia does not considers changing the European standard a priority. It is true, as Visco recalled, that the issue is not of direct relevance to the Supervisory Board but to the "legislator". And therefore the EU Commission and Parliament ”.
Rather on the issue of NPLs, which the crisis is destined to increase in the coming months and years, Visco confirmed that at the EU level the hypothesis of considering – even as an exception to state aid and therefore without the automatism of burden sharing – the launch of national bad banks with mixed public-private capital that will be able to take over non-performing loans not at market prices but at the highest "effective economic value". And the state-owned company Amco (formerly Sga) is the natural candidate to play the role of national bad bank.
Precisely the former Sga del Tesoro which is giving a strong hand to MPS to sell stocks of non-performing loans and which is now also involved in the bailout of the Ferrarini ham factory in contrast to the major Italian banks . Greetings and congratulations.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/visco-bankitalia-strattona-m5s-e-nagel-mediobanca-su-npl-mps-e-popolare-di-bari/ on Thu, 17 Sep 2020 13:20:25 +0000.