Monday, December 12, 2016

Monte dei Paschi: the oldest Bank in the world is so dangerous – business week

The former foreign Minister, Paolo Gentiloni, as Transitional Prime Minister of Italy in office, as he faces the time to run away. Because of the social-Democrat finds on his Desk in Palazzo Chigi a Dossier, deported to his predecessor and Mentor, Matteo Renzi, went out at the weekend there, according to all the rules of art: the unresolved crisis of the Banca Monte dei Paschi – the oldest Bank in the world, the third largest Bank in Italy and from what we know at the beginning of this week, currently the largest hotspot in Europe’s financial markets.

For Gentioloni the weal and Woe at the same time: The 62-Year-old was said to only be interim head of government until new elections in 2017, because state President Sergio mattarella needed in view of the escalating Bank crisis quickly with a confidence-inspiring technocrats solution The as a favorite-traded Finance Minister Pier Carlo Padoan shouldn’t change from his role as chief Troubleshooter, in Italy, banking crisis in the office.

at the same time to gain a little in the Bank question is for Gentiloni: “Either he makes it to the Europeans right or the Italians – you can’t be both, actually,” says Erik Jones, Director of the Johns Hopkins Institute in Bologna, and an economic adviser to the social democratic government.

Banca Monte dei Paschi survived five centuries, revolutions, state failure and economic crises. Now it is at the core of Europe’s new banking crisis. Why is the small Bank risky?

what is it

In the summer, called on the European Central Bank, the Banca Monte dei Paschi until the end of the year five billion euros of fresh capital to raise. Thus, the enormous rise in bad loans should be recognised in the balance sheet. Of about 110 billion euros loan volume of a minimum of 47 billion according to the ECB, as the acute risk of default. Since then, the Euro-zone changed at the beginning of the year, the rules may not be made of this capital increase on the state. A Bank is a crisis first of all, private companies must step in.

A Bank consortium under the leadership of the American Bank JP Morgan and the Italian Mediobanca and began a private rescue plan. It subordinated bonds into shares has been exchanged and from time to time rumors of new private anchor investors made the round of Time, it should be JP Morgan itself, change the investment funds from Qatar. It is a fact that no money flowed, and the time is short. In the summer, a newly-appointed Chef Marco Morelli requested that’s why last week, an extension of the deadline for the European banking supervision. But it was rejected. Morelli now remain 18 days to almost four billion euros will be raised.

Why is the issue so politically sensitive?

The Bank of Siena, which was not particularly impressive: less than a billion Euro market capitalization, not a 200 billion Euro of the balance sheet totals. And yet the markets are trembling, allegedly in front of her? Yes, because the Bank’s Deputy for a specialty of the Italian banking system in comparison to other European countries. Because here the errors of Bank managers ‘ meetings on a unique System, which they call in Siena, “groviglio armonioso”: the harmonious braid. A mesh of economic, political, and economic Elite, which illustrates very nicely what disastrous can develop the practical implications of the abstract notion of system relevance and how unreformable, a Bank, a poisonous symbiosis with the society.

Because the Bank poured a Foundation over the years, hundreds of millions to the city and became one of the largest Player in the Region. A lot more controversial, but: The people from Siena have not only benefited over the years from the dividends of the Bank – they have bought over years bonds; subordinated bonds, which were pretty interest. Papers to the value of 1.6 billion Euro 40000 citizens from Tuscany this kind of about.


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