December 23, 2016 – TG3 aired an interview with SEP Scientific Council member Francesco Saraceno, in which he discusses the recapitalization of Monte dei Paschi di Siena. With Parliament approving a €20bn fund for safeguarding the banking sector, questions have been raised about the “nationalization” of MPS. Saraceno argues that this was a last-minute exceptional circumstance. While the government will become a stakeholder in the bank, he does not believe it will remain so for long. In a few years, once the bank is in better shape, MPS stocks will likely be resold on the market, hopefully with minimal losses for the taxpayer. Long-term, the government is unlikely to remain a player in the market. The announcement of 100% coverage for holders of junior bonds could pose problems with the European Commission, but, since this is a one-off operation, it should not raise too many eyebrows.
- The original interview (in Italian) is available from TG3.