The editorial staff of ProiezionidiBorsa is always careful to monitor the news concerning Italian banks. The disruption of the complex balance of financial top management, in fact, often involves private citizens. Savers, account holders and borrowers are the last link in a chain and risk paying the bank risk bill high.
For this reason, we promptly informed the Readers on the Intesa Sanpaolo-UBI merger and on the events concerning MPS and the Banca Popolare dell’Alto Adige. In this article we want to deepen an amendment to the August Decree passed over in silence. After a hypothesis of reform launched by the Renzi government, the mutual banks have remained in the shadows for a long time. Today a bolt from the blue strikes these banks and the future of millions of customers: businesses, savers and simple account holders.
An amendment with uncertain consequences
The amendment presented by five parliamentarians, including Senator Elio Lannutti, could revolutionize the world of cooperative credit. We try to clarify the current situation and possible changes. In our country there are 263 cooperative credit banks. There are over four thousand branches distributed throughout Italy, with over 1,300,000 members and customers are even more. In fact, it would be more correct to speak of 2 banks with 263 different brands. Individual credit cooperative banks are often micro-institutions with very few branches. They operate locally with their own name, brand and management.
But they are not really independent. The two parent companies Cassa Centrale Banca and ICCREA manage this alternative banking world. The European Central Bank itself considers Italian cooperative credit as a single large institution, defined as “significant”. Thus, this fragmented reality must follow the same rules envisaged for the international banking giants.
A bolt from the blue hits these banks and the future of millions of customers
The current situation is often criticized by the top management of cooperative banks because the ECB imposes strict rules and criteria. According to some observers, this prevents the mutual banks from doing what they were born for: financing local families and businesses. Other rumors point to the micro-bank model as extremely risky and see the rules ofEurotower as stabilizers for the system. The proposed amendment would dismantle the current organization, reducing the two group leaders to systems of institutional protection.
Therefore, the strict supervision of the ECB would disappear with greater freedom for the many small boards of directors. The consequences would be truly unpredictable. Easier financing for businesses would also mean greater risks for institutions. The parameters for granting loans would be less controllable as well as the solidity of the individual cooperatives. In short, a bolt from the blue hits these banks and the future of millions of customers seems uncertain.
Risks and opportunities
The whole cooperative credit system could collapse. If any bank turns out to be excessively casual in granting credit, a domino effect could set in. Concerned savers could move capital to other institutions and cooperative banks would risk a liquidity crisis. The opposite could also happen, that is a virtuous circle between banks and businesses.
With benefits for all parties involved. Certainly, however, the lack of control has historically led to more risks than opportunities. The Editors of ProiezionidiBorsa will continue to inform readers about the evolution of the situation. To date, still a simple amendment to be examined by the Government and Parliament, but tomorrow a possible reality for millions of savers.
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