con le banche italiche, qualcosa rischi di prendere....
Obbligazioni bancarie Risoluzione Banco Popular DE0009190702
- Creatore Discussione Jackrussel
- Data di Inizio
stefanofabb
GAIN/Welcome
Pag.11 Milano Finanza di oggi.Buon giorno
Rottweiler
Forumer storico
Per cercare di capire come si sia giunti alla (ri)soluzione spagnola suggerisco di leggere, oltre al comunicato SRB già postato, anche i brevi comunicati ECB e CE che allego, e, soprattutto, i ben più impegnativi documenti finanziari pubblicati negli ultimi mesi dal Banco Popular. L'ultimo è uscito lo scorso 5 maggio e si intitola, ironicamente: "A solid and profitable business model".
Banco Popular’s Resolution Strengthens Credibility of EU’s Bank Resolution Regime
Last Tuesday, the European Union’s (EU) Single Resolution Board (SRB) undertook its first resolution of a failing bank, under which Banco Santander S.A. (Spain) (A3/(P)A3 stable, baa12 ) took over Banco Popular Espanol S.A. (Ba1/(P)Ba1 review for upgrade, ca). The resolution involved the bail-in of junior creditors, together with an injection of private-sector money, and did not affect depositors or the bank’s critical operating functions, and spared senior creditors and taxpayers from having to make contributions. The action is credit positive for the bank’s senior creditors and is more broadly positive for the EU’s financial stability. And, although it is negative for junior bondholders, the action respects the legal insolvency hierarchy. Having first bailed in €2 billion of the bank’s capital instruments, including Tier 2 and Alternative Tier 1 bonds, the SRB used its power to sell Popular to Santander for a nominal sum. Santander also will raise €7 billion of capital to support its assumption of Popular. This was the SRB’s first formal resolution under the Bank Recovery and Resolution Directive (BRRD), and adds credence to the official EU position that creditors will more consistently bear the cost of failure under the BRRD. Unlike in the recent case of Italy’s Banca Monte dei Pashchi di Siena, S.p.A. (B2/B3 review direction uncertain, ca review for upgrade), the EU’s approach in Popular’s case was squarely in line with both the letter and spirit of the BRRD. The SRB effectively executed Popular’s resolution over the course of an evening, with no apparent delay, and successfully tested the new institutional structure and made a clear and coordinated communication to the market. The European Central Bank on 6 June determined that Popular’s liquidity had deteriorated to the extent that the bank would be unable to pay its debts or other liabilities and was “failing or likely to fail,” and notified the SRB accordingly. The SRB determined that because Popular’s effort to sell itself had failed and there were no other credible supervisory options, a transfer of the bank to a “white knight” under resolution powers was in the public interest. The intervention occurred at such an early stage that the high-trigger contingent-convertible Additional Tier 1 securities, designed to convert to equity at a common equity Tier 1 ratio trigger of 7%, remained outstanding until they were written down alongside the bank’s other capital instruments. The broader lessons for European banks are less certain. European banks still lack sufficient volumes of dedicated loss-absorbing liabilities to facilitate resolution once a bank has reached the point of non-viability without the key operating obligations and deposits that the framework aims to protect also being negatively affected. Until such time, there will be a lack of clarity about how resolution authorities will respond to bank failures. Existing bank creditors therefore lack certainty over the extent to which the liabilities in which they have invested will absorb losses in a bail-in. However, earlier interventions such as Popular’s have the potential to produce lower loss rates that would be easier to absorb without affecting senior creditors. The lack of adequate subordinated liabilities also hampers the SRB and other EU resolution authorities in using resolution tools because beyond the circumstances of a precautionary recapitalisation, the BRRD requires that liabilities and own funds equal to at least 8% of a bank’s assets must bear losses before money from a resolution fund or government can be used to support the bank.
Last Tuesday, the European Union’s (EU) Single Resolution Board (SRB) undertook its first resolution of a failing bank, under which Banco Santander S.A. (Spain) (A3/(P)A3 stable, baa12 ) took over Banco Popular Espanol S.A. (Ba1/(P)Ba1 review for upgrade, ca). The resolution involved the bail-in of junior creditors, together with an injection of private-sector money, and did not affect depositors or the bank’s critical operating functions, and spared senior creditors and taxpayers from having to make contributions. The action is credit positive for the bank’s senior creditors and is more broadly positive for the EU’s financial stability. And, although it is negative for junior bondholders, the action respects the legal insolvency hierarchy. Having first bailed in €2 billion of the bank’s capital instruments, including Tier 2 and Alternative Tier 1 bonds, the SRB used its power to sell Popular to Santander for a nominal sum. Santander also will raise €7 billion of capital to support its assumption of Popular. This was the SRB’s first formal resolution under the Bank Recovery and Resolution Directive (BRRD), and adds credence to the official EU position that creditors will more consistently bear the cost of failure under the BRRD. Unlike in the recent case of Italy’s Banca Monte dei Pashchi di Siena, S.p.A. (B2/B3 review direction uncertain, ca review for upgrade), the EU’s approach in Popular’s case was squarely in line with both the letter and spirit of the BRRD. The SRB effectively executed Popular’s resolution over the course of an evening, with no apparent delay, and successfully tested the new institutional structure and made a clear and coordinated communication to the market. The European Central Bank on 6 June determined that Popular’s liquidity had deteriorated to the extent that the bank would be unable to pay its debts or other liabilities and was “failing or likely to fail,” and notified the SRB accordingly. The SRB determined that because Popular’s effort to sell itself had failed and there were no other credible supervisory options, a transfer of the bank to a “white knight” under resolution powers was in the public interest. The intervention occurred at such an early stage that the high-trigger contingent-convertible Additional Tier 1 securities, designed to convert to equity at a common equity Tier 1 ratio trigger of 7%, remained outstanding until they were written down alongside the bank’s other capital instruments. The broader lessons for European banks are less certain. European banks still lack sufficient volumes of dedicated loss-absorbing liabilities to facilitate resolution once a bank has reached the point of non-viability without the key operating obligations and deposits that the framework aims to protect also being negatively affected. Until such time, there will be a lack of clarity about how resolution authorities will respond to bank failures. Existing bank creditors therefore lack certainty over the extent to which the liabilities in which they have invested will absorb losses in a bail-in. However, earlier interventions such as Popular’s have the potential to produce lower loss rates that would be easier to absorb without affecting senior creditors. The lack of adequate subordinated liabilities also hampers the SRB and other EU resolution authorities in using resolution tools because beyond the circumstances of a precautionary recapitalisation, the BRRD requires that liabilities and own funds equal to at least 8% of a bank’s assets must bear losses before money from a resolution fund or government can be used to support the bank.
Jackrussel
Forumer storico
El próximo rescate bancario puede ser un pasteleo italiano
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