Banks will be the topic of one of the hotter debates in Italy over the next few months: This is confirmed by the storm blowing, again, on the Monte dei Paschi and, together with the large amount of evidence presented Monday by the Financial Times, placing “Renzi’s challenge to Brussels” in front-page headlines. Monday, stocks in the Bank of Siena dropped to a historic low, below 35 cents, dragging down all the banks and, more particularly, BPER and Intesa Sanpaolo. The underlying cause: the news that, a few weeks ago, on the dawn of the British Brexit referendum, the ECB sent the institution a very stern letter.
The ECB, in essence, wants to accelerate the plan for the progressive unloading of credit held within MPS: In the next three years, it would go down from €24 billion to €14 billion, unloading, in a few words, €10 billion in toxic products. It’s a request that’s not easy to comply with, if you consider that the a similar extreme measure from the Bank of Siena aimed to discharge only €3.5 billion by 2018. A traumatic action might lead to an imbalance of €3 billion, three times the actual capitalization in the Stock Exchange (about €1.2 billion) and recapitalizing, after the injections already received during the last years, and having seen the fact that the Atlante fund itself is searching for cash, is certainly not a simple operation.