By the end of 2021 at the latest, the Italian major bank Unicredit is to take over the crisis bank Monte dei Paschi MPS in Siena. However, only the active ones. Once again, the government, i.e. the Italian taxpayers, takes over the debts that have been accumulated. 5,000 Jobs are to be lost. This is reported by the New York Times and the NZZ. In July, the European Central Bank issued the MPS with the worst rating of the banks reviewed. The zero interest rate policy of the European Central Bank, thanks to which the bank’s outstanding loans cost almost no interest, was obviously not enough for the bank to extricate itself from the spiral of debt. The managers also saw no reason to take tough action, because they could also hope for the manna of the state in the future.
This calculation already worked after the financial crisis of 2008. Then again in 2017, when the Italian state rescued the bank from bankruptcy with about five billion euros and in return took over the majority of the shares. Before the planned sale to Unicredit, the state should once again assume all the accumulated bad loans and other credit risks. Not enough: the state should also grant MPS a tax credit of 2.2 billion euros. Unicredit is in a comfortable negotiating position because bankruptcy is out of the question for the state.
Because the Banca Monte dei Paschi is considered “Too Big to Fail"not so much because of its size as because of its widespread anchoring in the population. Politically, the government cannot afford to put so many small savers and small borrowers in distress through bankruptcy. The bank also finances many kindergartens and emergency services in Tuscany. Therefore, even for this bank: profits were privatized for many years, and losses were nationalized.
At least more than a dozen managers of the banks MPS, Deutsche Bank and Nomura were convicted in 2019 for illegally covering up the MPS ' problems with complex derivative transactions. The verdict is not yet final, reports the NYT.
Founded in 1472, the bank is considered the oldest in the world. They were founded by Italian merchants in the Renaissance period.