Banks credible on NPLs - Padoan

Minister announces creation of financial education committee

(ANSA) - Rome, July 18 - The moment has arrived for banks to adopt a credible strategy concerning non-performing loans, Economy Minister Pier Carlo Padoan told the Senate finance committee on Tuesday. "In my opinion it is time for banks to adopt with determination and incisiveness an active management of non-performing loans," Padoan said This should also be geared towards not accumulating additional bad debt, he added. The minister also said he is in favour of a law "clarifying that the responsibilities (of bank managers) are certainly important" and defining conduct that must be avoided and then sanctioned if necessary. Padoan then announced that he had signed the decree establishing the so-called committee for financial education.
    This is to be headed by Professor Anna Maria Lusardi, "an undisputed authority on the subject". The committee will "fill a gap in our system and I am convinced it will be very useful over time," he said. The case of two recently rescued Veneto banks "has shown that the conditions for accessing precautionary recapitalisation are tight" and that "the only tidy liquidation," Padoan continued. 'Nuclear' liquidation, on the other hand, would have led to a credit squeeze of 22 billion euros, affecting 55,000 companies with a negative impact on jobs, he said. The banking system would have also had to make 13 billion euros available within seven days for reimbursements, the minister added. The Italian banking crises, including the case of the struggling Tuscan lender Monte dei Paschi di Siena (MPS), have shown "on the one hand how the European framework has provided a degree of flexibility", Padoan said.
    However, they have also "highlighted a series of critical areas that need to be addressed and resolved within the process of completing the banking union", he concluded.