The head of the Bank of Italy's
supervision Carmelo Barbagallo on Tuesday defended the central
bank's action in supervising four middle-sized regional lenders
that went insolvent, calling it "insistent" during an audition
with Parliament's commission of inquiry the banking crisis.
"Irregularities were immediately brought to the attention of
judicial authorities", he said regarding on Banca Etruria, Banca
Marche, Cariferrara and Carichieti.
He added that "the responses of the four banks were
unsatisfactory".
"Supervising authorities cannot replace the subjects under
supervision to prevent situations from degenerating".
Four good banks formed from the positive assets of the
lenders were taken over by bigger banks.
Barbagallo also told the commission that the Bank of Italy
neither "asked nor encouraged nor, least of all, favored" Banca
Popolare di Vicenza to buy Banca Etruria.
At the time, the central bank's "supervision did not have the
elements to counter in advance such an initiative which, if it
had turned into a formal request, would have been examined
in-depth".
Earlier this year Italy pledged up to 17 billion euros to
clean up Banca Popolare di Vicenza and another lender in the
region, Veneto Banca, in the country's biggest rescue on record.
The measure included state support for Intesa Sanpaolo to buy
the two lenders' good assets for a token amount.
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