Thursday, October 30, 2008

Italy Banks Say: Give Us The Money, and No Questions! Similar to US.

The ANNOTICO Report

 

The Epitome of Chutzpah!!!!

 

The Banks don't want any Regulation, and any Government Interference, EXCEPT when the GREED of the Banks has put them in a HOLE, then the Banks want a BAILOUT, (non dare call it Corporate Welfare or Socialism), AND the Banks tell the Government that just because the Taxpayers are giving them Treasury Money, that The Government has NO RIGHT to Put any STRINGS on this Money.

 

My View point is that the Government should instead of Preferred Stock, which is better than Common Stock, that they instead expect BONDS, and those that have Priority, otherwise, there is Great Risk, and little Reward, since the Bank Assets and Deposits are HIGHLY LEVERAGED with KNOWN TOXIC LOANS

 

A Bankruptcy could let the Banks off the Hook, and the Taxpayer Stock worthless.

 

Don't Nationalise Banks, Italy Trade Body Tells Govt

 

Reuters

 By Robin Pomeroy

Thu Oct 30, 2008

 

ROME - The trade body for Italy's banks warned the government on Thursday against trying to have a say in how the industry is run, as the country waits to hear details of a state-sponsored rescue package for the sector.

Although the topic is not on the agenda of Friday's cabinet meeting, Italian financial media are expecting the government to announce in the coming days exactly how it will implement a bank rescue decree it passed in outline form on Oct. 9.

Prime Minister Silvio Berlusconi is due to meet bank chiefs later on Thursday to discuss the situation.

The government has passed emergency laws giving it the power to take stakes in banks with non-voting shares with preferential dividend rights, but the banking system is still waiting for details of how the measures will be implemented.

Berlusconi has hinted that further steps could be taken to help banks.

"It is necessary to underline the crucial importance of having a system which, if public capital is injected into banks or if the government intervenes to strengthen capital ratios, guarantees the full continuity of the private sector nature of (that) system," the head of the Italian Banking Association ABI, Corrado Faissola, told a parliamentary hearing.

In common with most other European countries, Italy took steps earlier this month to shore up its banking sector.

But no bank has so far come forward to accept the government's offer for a capital injection in exchange for non-voting shares, a scheme the state will implement on a case-by-case basis.

Banks say they are solid enough and are unwilling to risk the stigma of asking for help. They are also thought to be wary of allowing the state to gain more control over their actions.

But with neighbouring countries injecting vast sums of cash into their banks, some Italian lenders are being left with lower capital ratios, raising concerns that Italy's banks might look at cutting back on lending as a way to conserve funds.

NEW MEASURES BY THE WEEKEND?

Financial daily Il Sole 24 Ore said the government had already reached agreement with the Bank of Italy and major banks on how to proceed and said the new policies would be unveiled "by this weekend".

"The range of instruments available for the state intervention is wider than the 'shares with preferential dividend rights' mentioned in the (Oct. 9) decree," it said, repeating widespread speculation that the state could underwrite convertible bonds or bonds with an equity component.

"They will be instruments that are closer to debt than equity to alleviate the fear in banking circles that the state intends to enter banks' capital to take possession, to exert power, to dominate governance," Il Sole wrote.

Italian media have speculated that the country's top three banks -- Intesa Sanpaolo (ISP.MI: Quote, Profile, Research, Stock Buzz), UniCredit (CRDI.MI: Quote, Profile, Research, Stock Buzz) and Banca Monte dei Paschi di Siena (BMPS.MI: Quote, Profile, Research, Stock Buzz) -- could be candidates for a government capital injection.

Investment bank Mediobanca (MDBI.MI: Quote, Profile, Research, Stock Buzz), one of the banks Il Sole said might also take part in the scheme, played down that option.

Board member Tarak ben Ammar told journalists it had a Core Tier 1 ratio -- which measures capital available against risky assets -- of over 10 percent.

Italian banks' average Core Tier 1 ratios -- which measure the amount of capital a bank has against its risky assets -- are around 6 percent, compared with 8 percent and more elsewhere in Europe.

Berlusconi has said it is vital banks continue to lend, especially to individuals and small and medium-sized companies and the government is likely to require banks subscribing to the new measures give guarantees that they will do that. (Reporting by Robin Pomeroy; editing by John Stonestreet)

 

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