Italy's Populists Slam Regulators, Brussels, Over Bank Rules
(Bloomberg) -- Italy’s fractious populist leaders slammed banking “fraudsters” and their nation’s central bank, positioning themselves as the champions of savers and defying the European Union with a pledge to compensate investors who lost money when lenders failed.
Deputy Premiers Matteo Salvini, of the anti-migration League party, and Luigi Di Maio of the anti-establishment Five Star Movement shared the stage at a packed meeting in northern Italy with former stakeholders in Banca Popolare di Vicenza and Veneto Banca, which were liquidated in 2017.
Salvini targeted both the Bank of Italy and Consob, the financial market regulator, which populists have repeatedly accused of lax supervision and allowing malpractice to flourish in the banking sector. “The Bank of Italy and Consob should be reduced to zero -- more than changing one or two people, reduced to zero,” Salvini told the meeting, which was held in the town of Vicenza.
“If we are here, if you are here with your current account in the red, it’s because the people who were supposed to control things didn’t do so,” Salvini said. “I hope that the judiciary will do its job and that there are fraudsters who will end up in prison for a long time.”
Although they are coalition allies, Salvini and Di Maio are at loggerheads over issues from migration to security and an Alpine rail link project. They’re waging a protracted election campaign ahead of a European Parliament vote in May.
A parliamentary committee of inquiry into the banking sector, set up by the ruling coalition, is due to be approved by the lower house later this month and will start work in March, said Di Maio, adding it would hear testimony from the central bank and Consob.
The two Veneto banks were liquidated and the previous center-left government committed as much as 17 billion euros ($19.3 billion) to take on the bad assets of the pair, providing guarantees against further losses as part of their sale to Intesa Sanpaolo SpA.
Salvini promised to keep going with plans for a 1.5 billion-euro compensation fund for victims of bank failures, whether or not the EU approves the measure.
Di Maio echoed the Brussels bashing. “Every time we tackle competition or compensation problems, we receive notes from the European Commission which say we have to prefer rules which, would you believe it, always favor the strongest,” Di Maio said. “As we said before with Matteo, we don’t care one bit.” He added that after May’s EU vote, “this Europe is finished, and these letters won’t arrive anymore.”
Di Maio also said directors at the central bank should not be confirmed in their posts “if we think of everything that has happened these past years.”
Di Maio and fellow Five Star ministers blocked renewing the term of Luigi Federico Signorini, the Bank of Italy’s deputy director general, during an argument at a cabinet meeting on Thursday night, the newspaper La Repubblica reported earlier Saturday.
“We need to give a sign, we need a new departure,” Repubblica cited Di Maio as telling the ministers. Finance Minister Giovanni Tria and cabinet undersecretary Giancarlo Giorgetti, who is close to Salvini, reportedly pushed for a new term for Signorini. A decision on the issue was postponed.
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