Brussels, 23/11/2015 (Agence Europe) - According to a press release dated Sunday 22 November, the European Commission has approved separate resolution plans for four small Italian banks: Banca delle Marche, Banca Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della Provincia di Chieti.
The intervention of the Italian resolution fund will, it explains, allow the proper resolution of the banks whilst preserving financial stability.
Margrethe Vestager, the European commissioner for competition, explained that this would allow the use of public funds, and competition distortion resulting from the measures taken in favour of the banks, to be kept to a minimum. “It is critical that shareholders and junior creditors bear the costs and losses of the bank failures rather than taxpayers”, the Commissioner added.
The Italian authorities proposed resolution plans which foresee the resolution of each bank and the immediate creation and capitalisation of four temporary bridge banks. All of the banks' assets and liabilities, with the exception of remaining equity and subordinated debt, will be transferred to these bridge banks. This transfer will stabilise the activities that were formerly carried out by the banks will also protect depositors, the Commission explains. The objective is to sell the bridge banks in an open and non-discriminatory process with the aim of maximising the sales price. The resolution fund recently set up in Italy will provide the bridge banks with €3.6 billion, first of all to cover the negative difference between the assets and liabilities transferred and, secondly, to capitalise these bridge banks. This will be paid for by contributions of the Italian banking sector to the resolution fund. The measures will also include the transfer of the bridge banks' depreciated assets to a newly created asset management vehicle. The resolution fund will guarantee this measure. (Original version in French by Elodie Lamer)