Bank of Italy Governor Ignazio Visco on Saturday called for more powers for bank regulators to step in and dismiss bad managers, but defended his institution’s oversight of the troubled Monte dei Paschi di Siena.
Responding to criticism about banking oversight in the case of the Tuscan lender, Visco repeated that central bank supervisors had acted appropriately, but asked for more scope to act in exceptional cases.
“The supervisor should have the power to intervene when — based on solid evidence — it believes it is necessary to oppose the appointment of [bank] executives or to remove them,” Visco, who also sits on the European Central Bank (ECB) governing council, said in a speech to the Assiom-Forex conference in Bergamo.
The comments echoed remarks from ECB President Mario Draghi, who also called for regulators to be able to force out top executives in cases where a bank had run into trouble through the fault of its management.
Monte dei Paschi, Italy’s third-largest bank, has been at the center of a financial and political storm over a series of problematic derivatives contracts which has widened into a probe by magistrates into suspected bribery and false accounting.
The Bank of Italy has defended its handling of the scandal, which emerged in the wake of Monte dei Paschi’s 9 billion euro (US$12.04 billion) acquisition of smaller rival Antonveneta just before the global financial crisis erupted in 2008.
It has launched disciplinary proceedings against former management of the bank and could impose fines by next month, Bank of Italy Director-General Fabrizio Saccomanni told reporters.
Monte dei Paschi’s former chief executive Antonio Vigni, who was questioned by magistrates this week, was forced to resign in January last year after pressure from the Bank of Italy and former chairman Giuseppe Mussari stepped down in April last year. The central bank has repeatedly defended its handling of the case and detailed a series of steps it took, including inspections of Monte dei Paschi in 2010 and 2011, but it says it has no police-style powers.
Both regulators and the bank’s new management said key evidence of problems with one of the opaque derivatives and structured finance trades at the heart of the case was not uncovered until last year.
After spending the past two weeks scrambling to deal with the scandal, the lender’s executives and Italy’s central bank are now trying to exit the crisis management phase and expect to clear the way for a 3.9 billion euro state loan package.
The so-called “Monti Bonds,” the special instruments through which the loans will be made, are expected to be signed “in a very short time,” Monte dei Paschi chairman Alessandro Profumo told reporters on the sidelines of the conference.
Profumo gave no specific timeframe for the loans, which the bank needs in order to meet new European capital standards, and the European Commission still has to give its final approval to the aid as well as approve the bank’s current business plan.
The bank’s chief executive Fabrizio Viola said it was not in talks to restructure the trades dubbed “Santorini” and “Alexandria,” two of the deals at the heart of a fraud probe into the former management.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
RSS