After the Northern Italian Banca, a capital increase of Carige on the resistance of a major shareholder, has failed, has taken on the European Central Bank today, on a provisional basis the management of the Institute.
The ECB shall provide the beleaguered Italian credit institution, Banca Carige, under forced administration. Three interim managers and a monitoring Committee to replace the management of the money house, such as the European announced Central Bank (ECB) on Wednesday.
The decision of the ECB caused a nervousness in the financial markets. The Italian banking index, and the Index for the banks in the Euro-Zone fell by around 2.5 percent. The shares of Carige, were suspended from stock exchange trading.
At the end of December, a 400 million Euro capital increase for the ailing institution, which is supervised directly by the ECB had failed, the resistance of a major shareholder. Through the measures the ECB would ensure the stability of the Bank and ensure that it complies with the capital regulations.
Insufficient Capital Ceiling
The ECB was requested by the Institute, the capital pad and a fusion partner on the lookout. The Genoa-based Banca Carige suffers from the long years of the Italian economic slowdown and has amassed as many of the local competitors a mountain of bad loans.
In order to be more resilient to crisis, had separated Italy’s tenth-largest Bank already from several shops. During the recent stress test of the ECB, the institution was classified in a newspaper report as “vulnerable”.
Too many bad loans
The largest shareholder of the Bank, in the steel business Empire that had become family Malacalza, which holds 27.6 per cent. She had invested more than 400 million euros to build its share of the Bank, on the stock exchange now only around 20 million euros in value. At the end of December they had blocked the fresh capital increase.
Since 2014, Carige had collected a total of 2.2 billion euros from investors and in the same period, a loss of 1.5 billion euros of accumulated mainly in consequence of the burden of bad loans.
dk/hb (Reuters)