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Italian Taxpayers To Foot €17 Billion Bill As Rome Bails Out Another Two Insolvent Banks
Italian Taxpayers To Foot €17 Billion Bill As Rome Bails Out Another Two Insolvent Banks
Two weeks after the first, and biggest, European bank bail-in took place under the relatively new European bank resolution mechanism, the EBRD, when Spain’s Banco Popular wiped out the holders of its most risky securities, including equity and AT bonds, and then selling what was left of the bank to Santander for €1 – a process that took place without a glitch – Italy may have just killed any hope of a European banking union, when the bailout of two small banks made a “mockery” of Europe’s new regulation.
Late on Sunday, Italy passed a decree that will effectively sell the good part of the two banks to Intesa, Italy’s second-largest and best-capitalized bank. Intesa said last week that it would be willing to buy the best assets for a token price of €1 as long as the government assumed responsibility for liquidating the banks’ large portfolio of sour loans. As a result, Italy said it would commit as much as €17 billion in taxpayer funds to clean up the two failed “Veneto” banks in one of Italy’s wealthiest regions and support the takeover of their good assets by Intesa Sanpaolo SpA for a token amount. After an emergency cabinet meeting on Sunday, Finance Minister Pier Carlo Padoan said the Italian government will provide Milan-based Intesa with about €5.2 billion euros to allow it to take on Banca Popolare di Vicenza SpA and Veneto Banca SpA assets without hurting capital ratios, The European Commission, in a separate statement, said it approved the plan for the two banks and that it is in-line with state-aid rules.
Unlike the Banco Popular bail-in by Santander, however, Intesa would only take on the good assets. PM Gentiloni said the lenders will be split into good and bad banks and that the firms, with taxpayers on the hook for the bad banks.
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U.S. & ‘International Banks’ Finance Ukraine’s Civil War Washington’s Blog
U.S. & ‘International Banks’ Finance Ukraine’s Civil War Washington’s Blog.
On November 26th, Ukraine’s Prime Minister, Arseniy Yatsenyuk, said, “Our cabinet has resumed the program of activity and cooperation with the International Monetary Fund (IMF), the European Bank for Reconstruction and Development (EBRD) and other banks. Today international investors are not ready to go to the country, but international banks are ready to help us. … We would not have survived without the international assistance.”
In a related news-report, the investigative journalist who goes by the pseudonym “Tyler Durden” headlined at his zero hedge website on November 25th, “Hacked US Documents Said To Reveal Extent Of Undisclosed US ‘Lethal Aid’ For Ukraine Army,” and he posted the documents, which seem authentic, and which include U.S. supplies of “400 sniper-rifles, 2,000 assault-rifles, 720 hand-held grenade launchers, 200 mortars with more than 70,000 mines, 150 stingers, 420 antitank missiles and so on.” Also shown there is an authorization signed by President Obama authorizing the U.S. Secretary of State, to “direct the drawdown of up to $5 million in defense articles and services of the Department of Defense and military education and training to provide immediate military assistance for the Government of Ukraine, to aid their efforts to respond to the current crisis,” and “to direct the drawdown of up to $20 million in nonlethal commodities and services from any agency of the United States Government,” for the same purpose.
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