Bail-Ins Coming To Italy? World’s Oldest Bank “Survival Rests On Savers”

GoldCore's picture

Bail-Ins Coming To Italy? World's Oldest Bank "Survival Rests On Savers"

The world's oldest bank and Italy’s third biggest bank, Monte dei Paschi di Siena (MPS), is making a last-ditch emergency attempt as the year ends to convince tens of thousands of ordinary Italian savers to help it escape state hands.


MPS shares fell 8.5% in early trading this morning as the bank began its attempt to entice institutional and retail investors to snap up fresh shares.  The bank wants 40,000 retail investors and savers to take part in a complex €5 billion (£4.18bn) bailout. The Tuscan lender said it is pressing ahead with a highly-ambitious plan to persuade private investors to convert their bonds into shares. This process must be completed in the next two weeks - by the end of the year.

MPS has become the focus of fears about the Italian banking system, which is on the verge of collapse with €360 billion of bad debts amassed in recent years. Unicredit, Italy’s biggest bank, last week announced plans to raise €13 billion through a record-breaking share issue and slash another 11% of the workforce

The risk of bail-ins in the €4 trillion banking system in Italy remains high and if the current bailout attempt does not work, then it is expected that the EU will force the Italian government to enforce the new EU and G20 enacted bail-in legislation which would see individual savers, including small and medium size enterprises, having some of their savings confiscated.

There are state guarantees on bank deposits of €100,000 in most EU jurisdictions but it is important to realise that this arbitrary "guarantee" figure could be reduced significantly in event of a large bank or many large banks failing.

Bail-ins are “now the rule” in most Western countries and depositors need to begin preparing by diversifying and not have all their ‘saving eggs’ in the ‘banking basket’. An important way to protect investments and savings is to be diversified and have a healthy allocation to physical gold in non bank, allocated and segregated storage.

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Gold Prices (LBMA AM)

19Dec: USD 1,137.60, GBP 913.15 & EUR 1,089.14 per ounce
16Dec: USD 1,134.85, GBP 911.17 & EUR 1,084.80 per ounce
15Dec: USD 1,132.45, GBP 904.37 & EUR 1,080.70 per ounce
14Dec: USD 1,160.95, GBP 917.38 & EUR 1,091.99 per ounce
13Dec: USD 1,157.35, GBP 911.18 & EUR 1,090.80 per ounce
12Dec: USD 1,154.40, GBP 916.82 & EUR 1,089.41 per ounce
09Dec: USD 1,168.90, GBP 927.64 & EUR 1,100.75 per ounce

Silver Prices (LBMA)

19Dec: USD 16.00, GBP 12.89 & EUR 15.34 per ounce
16Dec: USD 16.05, GBP 12.91 & EUR 15.36 per ounce
15Dec: USD 16.14, GBP 12.95 & EUR 15.51 per ounce
14Dec: USD 17.11, GBP 13.52 & EUR 16.07 per ounce
13Dec: USD 17.01, GBP 13.39 & EUR 16.04 per ounce
12Dec: USD 16.86, GBP 13.34 & EUR 15.90 per ounce
09Dec: USD 16.95, GBP 13.45 & EUR 16.03 per ounce

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silverer's picture

Bailing out these big banks is like lending money to a drug addict. You have to wonder how these banks can cry for help when the CEO's are taking salaries high enough to pay for a huge part of their administrative operations.

harrybrown's picture

The building is already well alight... exit ASAP with what you can carry.

GCT's picture

Some of us must keep money in the bank.  We own a small bakery and must have funds to buy from venders.  We did however move our money around until every bank account does not exceed the FDIC limit.

Of course if all the banks in the world collapse it will not matter that is why we have the remaining in tangible assets like PM's, guns and ammo, and land.

1980XLS's picture

Why would anybody keep money in a bank?

Has anybody learned anything?

GunnerySgtHartman's picture

I keep about 4 weeks' worth of expenses in the bank to pay bills and no more.  I've been advising friends and neighbors to do the same ... they give me a "why, my money is safe, it has FDIC!" look.  Trying to explain a bail-in is usually an exercise in futility.

Bail-ins are coming, whether we like it or not.

Mustafa Kemal's picture

"Why would anybody keep money in a bank?"

That's a good question. My sampling shows that most americans dont know what a bailin is. The same dont know what a DB is or what a Monte dal Pasche is. If this ever really does go south there are going to be alot of very surprised people.

Let it Go's picture

A lot is riding on just how certain forces react to Italy's vote and looming in the background is the possibility it might set in motion a series of events that could break apart the Euro-zone. Nine years after the onset of the financial crisis in 2007, output remains 8% down from its pre-crash level.

As far-fetched as the thought Italy would  follow the U.K.'s example and leave the European Union may seem, capital flows suggest that some people aren’t waiting to find out. A great deal of money as been sneaking out the backdoor, more on this and the other ramifications the vote holds below.

new game's picture

dead bank walking...

world a wash in bad debt, whilst the bankers enjoy the life most dream of...

iceland the muther fuckers, ice being the key operative word.

Iconoclast's picture

Read yesterday that Monte Dei Pascha is trying to dump 23bn of bad euro loans and needs €6 bn injection to survive. The Italian banking system has circa 300bn of NPLs with 200bn unlikely to ever be paid. If we didn't exist in some monetarist fantasy wonderland, where NIRP/ZIRP and QE to infinity healed all financial problems, then this issue would bring down the European banking system, it's arguably as big as; Lehman, Bear Sterns and the mbs crash. But somehow we've (Joe Public en masse) become, hypnotised, insulated and immune to this type of news and situation, believing that the masters of the universe will somehow solve it.

Dragon HAwk's picture

Anything a bank wants you to do, is probably not in your best interest.

Dr. Spin's picture

Hear hear...

What does it say about us that we continue to countenance the fat ticks???