Banks, 300 million fund launched: a parachute for small ones

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A fund with an (indicative) endowment of approximately 300 million, financed by the banking system on a voluntary basis, to intervene in smaller banks and prevent possible crisis situations: this is the project on which the Voluntary Scheme, the association set up at internal of the Interbank Fund. 102 Italian banks participate in the Scheme, i.e. 78% of the banks associated with the Fitd, covering 93.4% of total protected deposits.

The project

The idea, developed by an internal commission within the bodies of the Scheme, should see the light approximately within the first half of the year, according to what was gathered by Il Sole 24Ore. The rationale of the initiative is to act preventively on the smallest and most fragile but still performing banks, in an “early intervention” logic. The vehicle radar is aimed in particular at the world of less significant banks, a varied sector, mainly in excellent health, also given the maxi-rate season, but also characterized by a handful of banks – we are talking about about ten institutions – in conditions of difficulty which are not overt, and which however are also the subject of attention from the Bank of Italy.

For the voluntary scheme – an entity created after the annulment by the European Court of the EU provision which branded the preventative interventions of the Fitd on Tercas as prohibited state aid – it is, in short, a matter of looking more in perspective, rather than acting in an emergency. Also because, as highlighted by Governor Fabio Panetta himself at Assiom Forex at the beginning of February, it is necessary to move in advance of problems arising. “Already today we must ask ourselves about the risks that we may find ourselves facing tomorrow”, the number one at Palazzo Koch had highlighted, calling on bankers to pay attention to the Achilles’ heels constituted by the high cost of collections, a worsening of non-performing loans and a weakness of capital. Following this logic, the Schema-Fitd, which also has among its powers that of monitoring the consortium banks, would intervene on institutions in conditions of weak capital – or marked by an accentuation of the risks or critical issues of the business model – to prevent crises that may lead to liquidation. The latter solution would have much worse costs for the system, given the Fitd’s obligation to protect deposits.

In fact, this is how the aborted “Neptune project” is reborn, the plan that was taking hold at the end of 2022 based on public (200 million) and private (300 million) co-financing, for a total of 500 million. With the public endowment no longer available, today the aim is for a firepower of 300 million, which would be contributed by the members of the Scheme. The value is, as mentioned, indicative, and will have to be defined by the Assembly between May and June, once the Management Board has approved the changes to the statute. It is yet to be decided whether the draft will take place ex ante, in order to then be able to intervene freely, or whether it will be on call in case of need. In the case of the Nettuno project, the scheme envisaged the creation of a closed securities fund, managed by an asset management company, which would have had the task of deciding on the rescue. In this case the Svi’s intervention would be directly in the capital or in debt or guarantee instruments.

The Fitd, stop contributions

Meanwhile yesterday in Rome, the Fitd Assembly (which was held together with that of the Svi) approved the 2023 budget and noted that the Fund, like the European Resolution Fund, will effectively be fully operational in 2024. Thanks to the contributions of the banks, which since 2015 have reached around 8 billion euros, on 2 July 2024 (the date to which the installment is brought forward compared to December) the financial endowment will be equal to around 5.8 billion euros, equal to 0.8% of protected deposits, a level considered target. A As of 31 December 2023, the available financial resources are approximately 4.6 billion euros, corresponding to 0.63% of protected deposits. Good news for banks. Because in the absence of new interventions, there will be no need for further adjustments, other than adjustments linked to the deposit base.