Italian government studying new rules to help banks reduce NPLs

Italian government (as reported by Sole24Ore)  is considering including in the next budget law measures

  1. to widen the scope of bad loan securitisations allowing the possibility of “mixed structured” including both impaired and performing loans and  including tax concessions for special purpose vehicles as well as to
  2. allow banks to issue bonds that would rank between highly protected senior and junior debt in the event of a default.

The technicians, in short, work on a series of instruments to accompany the “long road ahead” that must be covered by a financial system  according to the words of the Minister of Economy Pier Carlo Padoan (as reported by LaRepubblica) during a recent Luiss conference on the revitalization of the banking system:

«a un punto di svolta, ma bisogna continuare su questa strada. Il cammino resta lungo».

“at a turning point, but we must continue along this path. The road remains long “.


Ignazio Angeloni, a member of the Supervisory Board of the European Central Bank has a similar opinion:

«La strada che le banche europee e italiane in particolare stanno percorrendo è quella giusta. Le banche italiane  hanno fatto un percorso notevole, c’è stato un miglioramento netto, ma non bisogna sedersi sugli allori».

“The path that European and Italian banks in particular are taking is the right one. The Italian banks -have made a remarkable path, there has been a net improvement, but you don’t have to reduce the pace. “

In addition, Mr Angeloni has pointed out that small and medium banks will be the next focus especially in countries like Italy, Germany and Austria.

These entities are not directly monitored by ECB ( actually national Central Banks act on behalf of ECB) and may face relevant conflicts of interest and irregularities, since depositors, creditors and investors can be the same people.

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GLG – Gerson Lehrman Group – Council Member

About Massimo Famularo

Investment Manager and Blogger Focus on Distressed Assets and Non Performing Loans Interested in Politics, Economics,
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