The European Central Bank (ECB) took temporary control of Banca Carige, Italy's tenth largest bank, on Wednesday, 2 January. This initiative, which testifies to the difficulty of the Italian banking sector in putting an end to doubtful bank loans, will hold the government to account.
Now chaired by the Italian Andrea Enria, the sole banking supervisor in the euro zone has appointed three directors and a supervisory board to replace the resigning board of directors, after the shareholders rejected the recapitalisation plan submitted.
The decision to impose temporary administration is an early intervention measure aimed at ensuring continuity of banking activities and pursuing the objectives of a strategic banking capitalisation plan, the ECB said in a statement.
The new directors will have to keep the ECB closely informed of Banca Carige 's situation and, if necessary, act to ensure that the Italian bank complies with regulatory prudential requirements in a sustainable manner.
The new management indicated that an exploratory reflection on a possible merger with another banking institution was under way.
In June 2017, the European Commission approved the liquidation of Banca Popolare di Vicenza and Veneto Banca and the sale of their solvent activities to the Italian group Intesa Sanpaolo in return for guarantees from the Italian government (see EUROPE 11816). It had also authorised the preventive recapitalisation of Monte dei Paschi di Siena through public funds while imposing losses on small private investors.
Elected in part on the promise to stop helping failing banks, the Italian populist government has set aside a €1.5 billion fund in the 2019 budget to compensate small investors who have been involved in previous bank bailouts. (Original version in French by Mathieu Bion)