Socio-Economics History Blog

Socio-Economics & History Commentary

Two Italian Zombie Banks Toppled Friday Night

  • Two Italian Zombie Banks Toppled Friday Night
    by , http://wolfstreet.com/
    ECB shuts down Veneto Banca and Banca Popolare di Vicenza.
    When banks fail and regulators decide to liquidate them, it happens on Friday evening so that there is a weekend to clean up the mess. And this is what happened in Italy – with two banks!


    It’s over for the two banks that have been prominent zombies in the Italian banking crisis: Veneto Banca and Banca Popolare di Vicenza, in northeastern Italy.

    The banks have combined assets of €60 billion, a good part of which are toxic and no one wanted to touch them. They already received a bailout but more would have been required, and given the uncertainty and the messiness of their books, nothing was forthcoming, and the ECB which regulates them lost its patience.

    In a tersely worded statement, the ECB’s office of Banking Supervision ordered the banks to be wound up because they “were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements.”

    “Failing or likely to fail” is the key phrase that banking supervisors use for banks that “should be put in resolution or wound up under normal insolvency proceedings,” the statement said. This is the first Italian bank liquidation under Europe’s new Single Resolution Mechanism Regulation. The ECB explained:

    read more.

end

June 26, 2017 - Posted by | Economics | , , , ,

Sorry, the comment form is closed at this time.

%d bloggers like this: