Venerdì, 19 Ottobre 2018

Prosecutors to probe central bank, Consob in MPS case


Trani, January 30 - Prosecutors have opened an
investigation into the supervisory actions of both the Bank of
Italy and market watchdog Consob over troubled Monte dei Paschi
di Siena (MPS), consumer group Adusbef said Wednesday.
The probe - the second thus far - comes amid a financial
and political scandal with as many twists and turns as a
medieval street in the Italian hill-town of Siena where MPS, the
world's oldest bank, was founded.
And the crisis has not only drawn in major financial market
players and Italian politicians, but also some of Europe's
leading banking authorities.
This latest prosecutors' probe will review actions by Mario
Draghi, current chief of the European Central Bank and former
head of the Bank of Italy, which has supervisory
responsibilities over banks.
Adusbef's complaint asks Trani prosecutors to review just
how the Bank of Italy and market regulator Consob failed to see
huge financial risks at MPS, Italy's third-largest bank.
Focus will be trained on the controversial takeover by MPS
of a smaller bank, Antonveneta, in 2008, at what many say was an
inflated price and led to many of the current problems.
In its defence, the Bank of Italy said that as early as
2010 it sought daily reports from MPS on its liquidity levels,
and a week ago noted that MPS had hidden documents, making it
impossible for regulators to understand the "true nature" of the
bank's financial situation.
This latest probe also comes shortly after prosecutors in
Siena announced that they are investigating actions by the
former managers of MPS, described by one prosecutor as creating
a situation that was "explosive and tension-filled".
Prosecutors are probing former president Giuseppe Mussari
as well as other executives for fraud, judicial sources said
The Siena probe is based on claims by some MPS shareholders
that the Antonveneta deal was approved by MPS managers and
regulators without proper concern for the strain the deal would
put on the bank's finances.
The Siena-based lender is also facing intense scrutiny for
derivatives trades which could cost it some 720 million euros.
So troubling are those losses, which could indirectly
affect other parts of the country's intertwined financial
system, that the European Commission recently gave provisional
backing to a 3.9-billion-euro Italian government bond issue for
the bank to preserve financial system stability.
Such financial support for MPS has also drawn Italian
politicians into the fray, both members of the current
government which approved the financial support, and also the
centre-left Democratic Party (PD), which has long been
historically linked to the bank's foundation.
Italian Economy Minister Vittorio Grilli on Tuesday hinted
that MPS could face nationalization if it fails to pay the money
back, though he ruled out any further bailouts.
And the total losses may not yet be known.
Monte Paschi could face another 500-million-euros loss on a
2010 securitization of about 1.5 billion euros of real-estate
loans, dubbed "Chianti Classico," weekly Panorama reported
Wednesday, citing documents that include minutes of board
meetings from November and December 2012.
Meanwhile in Berlin, a spokesman for the German government
- which, as Europe's largest economy, plays a key role in the
ECB - said in a statement it has confidence in Draghi and the
independent work of the ECB.

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