Bad debts, debt collection and Bcc: the government measures – The Republic

MILAN – It is built on three main points of the government measure which aims to demobilize part of the 200 billion loan defaulters currently in the belly of the banks (it comes down to just under 90 billion net of hedges) and provides for the granting of state guarantees in the context of loan securitizations in suffering (this is essentially the sale of receivables through ‘ emissions of new bonds, in which the same credits will be “bundled”).

the collateral on bad loans. The state will provide only titles in the senior class on condition that receive a rating level by an agency recognized by the ECB corresponds to an investment grade. The warranty becomes effective when the bank has sold more than 50% of the junior securities. This warranty is free, however, and its price will be defined on the basis of costs credit default swaps (insurance against failures) of Italian companies with a corresponding to that of the senior thiols rating that would be guaranteed.

the guarantees also may be required by banks securitising and give non-performing loans, against the payment of a periodic fee to the Treasury, calculated as a percentage per annum on the amount guaranteed, and – as mentioned – to a market price which will be calculated based on the CDS (credit default swaps, or insurance against non-payment of securities) of Italian issuers with a risk level corresponding to that of the underlying assets.

in addition, the price will be increasing over time, is to take into account the increased risk associated with a longer duration of the notes, is to introduce the scheme a strong incentive to quickly recover the credits. The expected price for the first three years is calculated as an average mid-price of CDs in three years for issuers with a rating corresponding to that of the tranche guaranteed. The fourth and fifth year the price will increase as a result of the application of a first step-up (CDS 5 years) and the payment of an incentive bonus to offset the lower rate paid for the first 3 years. From the sixth year onwards the price of the guarantee will be full (CDS to 7 years). For the sixth and seventh year shall be also due to a further increase incentives to offset the lower rate paid for the first 5 years. According to experts, together with interventions of last summer to speed up debt recovery times, the operation can mobilize 70 billion of loans in the next few years (infographic).

Debt . Always to reduce management time a delinquent credit (currently exceeds seven years), it is expected another set of rules. SI These adjustments to the bankruptcy legislation, together with other provisions which concern the establishment of pledges of movable property to enable enterprises to secure loans granted by banks. There should then be a greater ease of access to the numbers in the databases, in order to allow the parties of the selection procedures to solve more quickly the recovery and disposal of loans.

Bcc and Reform retirements. the penultimate issue concerns the credit cooperative, with the definition of dell’autoriforma cornerstones of the Bcc: are expected to establish a single holding company, which should have a minimum capital of 1 billion, to which the cooperative credit institutions They may join with a pact of cohesion. The same cooperative banks will own the holding control; through the agreement, then it will establish a network of mutual guarantees for to pool the assets dispersed in various Bcc. In the end, he should get out a strong subject of a heritage of over 20 billion. In the last hours also it emerged assumptions about the introduction of tools for the early retirement of the bank, in the face of a social security allowance reduction. A measure in the short-term impacts on public accounts and therefore would be defined yet with a focus supplement. The need to proceed with mergers in the sector, thus with streamlining the workforce, plays for an acceleration of the theme, but probably will slip to another location.

Topics:

Council of Ministers

guarantee

sufferings

Bcc

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