Public intervention in Italy to save ailing Banca Carige

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Author (Corporate)
Publication Date 2018-
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Summary:

Reports of the reaction from national and international stakeholders following attempts to save Italy's Carige Bank from collapsing.

Further information:

Following months of growing concern over the strength of Banca Carige and a set of liquidity crises, Italian banks decided in November 2018 to rescue the financial institution with the purchase of a €320 million hybrid bond. However, the bank's main shareholder blocked a new share issue in December of up to €400 million. The European Central Bank (ECB) decided on 2 January 2019 to appoint temporary administrators to take charge of the bank, in an unprecedented effort to save the lender. On the same day, Italy's market watchdog decided to halt trading in Carige's shares.

On 8 January, Italian authorities approved a decree setting up a €1.3 billion fund to cover potential costs of emergency measures to save this ailing bank. The decision was seen as a major U-turn by the country's leading Five Star Movement, which had in the past been critical of decisions that use taxpayer money to rescue private banks.

Related Link(s)
Commentary and Analysis
EPRS: Briefing, January 2019: Recent measures for Banca Carige from a BRRD and State Aid perspective http://www.europarl.europa.eu/thinktank/en/document.html?reference=IPOL_BRI(2019)624413

News
ANSA, 02.01.19: Carige placed into administration by ECB http://www.ansa.it/english/news/business/2019/01/02/carige-placed-into-administration-by-ecb_c7b337b5-5e9d-4f8c-9596-53b20741dfe1.html
EurActiv, 02.01.19: ECB installs temporary administrators at Italian bank https://www.euractiv.com/section/economy-jobs/news/ecb-installs-temporary-administrators-at-italian-bank/
Reuters, 02.01.19: ECB calls in administrators to save Italy's Carige https://uk.reuters.com/idUKKCN1OW0KE
Bloomber, 07.01.19: Italy Populists Bend to Pressure as Carige Gets Guarantee https://www.bloomberg.com/news/articles/2019-01-07/italy-populists-offer-state-guarantees-to-failing-carige-bank
Euronews, 07.01.19: Carige's administrator says share issue might not be needed https://www.euronews.com/2019/01/07/cariges-administrator-says-share-issue-might-not-be-needed
Euronews, 08.01.19: Italy sets up €1.3 billion fund to cover Carige rescue costs https://www.euronews.com/2019/01/08/italy-sets-up-1-point-3-billion-fund-to-cover-carige-rescue-costs
The Wall Street Journal, 08.01.19: Pledges Made by Italy’s Populist Government Come Up Against Economic Reality https://www.wsj.com/articles/italy-offers-bank-bailout-despite-past-pledges-11546954204
RTÉ News, 08.01.19: Italian bank Carige to tap state guarantee for funding https://www.rte.ie/news/business/2019/0108/1022000-banca-carige-italy/
Reuters, 08.01.19: Carige gets state-backed funding after government U-turn https://uk.reuters.com/article/idUKKCN1P20TE

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