By Graham Vanbergen:
Last November the mainstream media wrote headlines of impending doom in
the Italian banking industry – it made good reading and they weren’t
wrong. But now it’s actually arrived there’s something of a media
‘blackout’. The European Central Bank quietly released the information
which, has largely gone unreported.
The ECB’s press release was entitled
“ECB deemed Veneto Banca and Banca Popolare di Vicenza failing or likely
to fail” when really it should have read “ECB deemed Veneto Banca and
Banca Popolare di Vicenza bankrupt as they are in law unable to pay
their debts.”
The decision by the ECB came about as a
result of lack of capital. The Single Resolution Board (SRB) concluded
that conditions for a resolution action were not fulfilled and that the
two banks are to be wound up under Italian insolvency procedures.
