Thread by @gianlucac1

On the ECJ ruling against the EU Commission on State aid for Italian banks THREAD
Here the ECJ decison curia.europa.eu/jcms/upload/do…

All italian newspapers are trumpeting that "if the Resolution Fund (the voluntary arm of the Deposit guarantee Fund aka FITD) would have intervened

"the banks and the savers would have been saved as they were healthy"

THIS IS BLATANTLY FALSE

Here is the story as per the Bank of Italy bancaditalia.it/media/approfon…

So besides the burden sharing by the equity holders and the bondholders (640mn) of the 4 banks, the Resolution Fund

has funnelled into the 4 banks
1) 1.7bn to cover the losses
2)1.8bn to recap the good banks
3)140mn for immediate needs

Total 3.6bn

There is no change in the crisis management. A "voluntary" scheme was already in place, and Atlante was added to the tools afterwards

SO THE POINT IS: WHAT ARE THEY ALL TALKING ABOUT? IF A BANK HAS UNRECOGNISED LOSSES SOMEONE HAS TO PAY THEM. FIRST OF ALL THE SHAREHOLDERS AND THEN FOLLOWING THE PECKING ORDER

OR DO YOU WANT SPILLOVER INTO PUBLIC FINANCES, CONTAGION TO GOOD BANKS, & MORAL HAZARD ?

@ThManfredi @Phastidio @DeShindig @micheleboldrin @jeuasommenulle @dlacalle_IA @ricpuglisi @CarloStagnaro @carloalberto @OGiannino @lucianocapone @FerdiGiugliano @SMerler @upanizza @a_presbitero