Friday, December 30, 2016

Italian crisis Bank: How much state aid, Monte dei Paschi needs? – FAZ – Frankfurter Allgemeine Zeitung

Only in two to three months will determine whether the Italian state and the crisis Bank Monte dei Paschi di Siena (MPS) must support a “precautionary increase in capital”. Until then, the EU Commission must decide, in cooperation with the European Central Bank (ECB) as a Bank supervisor, whether the requirements are met in accordance with the EU state aid law – or, more precisely:

Werner Mussler author: Werner Mussler, the economic correspondent in Brussels.

If MPS really as a “solvent Bank”, and with a precautionary state capital injection thereof is allowed to be, without having to be processed. Ahead of talks between Rome, Frankfurt and Brussels. The Italian government has not submitted an application for the approval of such state aid with the EU Commission. Therefore, until further notice, open, how much the (state) capital, the institution really needs.

not taxpayers, but shareholders and creditors should, in Principle, should be handled ailing banks, according to the rules of the new EU Bank recovery and resolution Directive BRRD, and you are responsible for. This General Bail-in rule does not apply in a special exception case, Italy is calling now. Therefore a “precautionary increase in capital” of the state for a solvent, in a negative scenario, but vulnerable Bank is possible.

the restructuring plan is before

The idea behind the special scheme is that in this case, “only” a matter of a healthy Bank as a hedge in the unlikely event of a risk scenario. Of course, it is doubtful that MPS is really at the core of healthy and solvent.

More about

Even if the exception rule should be complied with the General EU state aid rules. You see a abgemildertes Bail-in. It is the shareholders and the holders of subordinated bonds must be asked to pay. Monte dei Paschi had asked the latter to exchange their subordinated bonds into new shares. This 2.3 billion euros, came in.

retail investors, which had sold the Bank bonds, but the state compensated. He wants to buy the shares and senior bonds. Is this on the basis that the Bank had advised the small investors wrong. The restructuring plan for MPS, which is for the approval of the state aid necessary, is not yet available.

8.8 billion euros is needed?

The ECB calculated in this week a total capital requirement of 8.8 billion euros. The Italian government must expend, according to calculations by the Italian Central Bank from Friday about 6.6 billion euros for the recapitalization of the Bank, the Rest would come from private investors. In Brussels, it is, of course, it was far too early to call exact Numbers.

The short-term liquidity of the Bank seems for the time being to be secured. According to Italian newspaper reports from the Friday the MPS want to take in the next year about 15 billion euros of foreign capital. According to “La Repubblica” to bonds and money market papers to be issued, a third short runners, the Rest of the three-year papers. The Italian government will give guarantees.

is this possible, has extended the EU Commission on Thursday evening, which began in August existing approval for a General Bank guarantee under the Italian state, to the position of the payment ability of Italian institutions to six months. Such state guarantees have been granted since the financial crisis in a number of EU States; they are present also in Poland, Portugal, Greece and Cyprus.

Two to three months, could go to the country

money flows are not connected. At the same time, the EU competition authority has approved of the precaution, for the case of need – such as the rules on state aid provided short-term government Liquidity support for MPS. These have to do with the possible precautionary capital increase from state funds.

it is checked To the latter by the EU-Commission and, where appropriate, approved, are likely to go to the entrance of the Italian application two to three months. That it will reject the authorities in Brussels are, flatly, should be excluded. The competition authorities had, in the past week that Italy have developed ten days ago adopted precautionary Bank rescue Fund, in close consultation with Brussels.

This suggests that Italy has already received outlines of a Bank rescue can be implemented without the Commission acts as a spoilsport. This also indicates that a precautionary increase in capital by the state appears at least possible in principle.


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