The pin spot fell back on Italy’s banks Tuesday morning after prosecutors reportedly opened an enquiry into alleged market manipulation by the Genoa-based Banca Carige.
The bank has been hit with a command crisis after its chairman, deputy chairman and two board members abdicated in the last few weeks over disagreements with the bank’s chief big cheese. The crisis deepened after the European Central Bank (ECB) requested finish finally Friday to see a specific plan for how the lender will meet additional large letter requirements amid the differences within management.
Carige said Monday in a asseveration that the ECB had given it until no later than November to come up with its initial plan and that the process should “assess all options” including a commingling.
On Tuesday, a source with direct knowledge of the matter told Reuters that the bank is now beneath investigation for possible market manipulation. According to the news agency, Carige is “fully” assisting with the authorities. It was also reported that Carige made readily obtainable all the minutes from all board and shareholder meetings between 2017 and 2018, as expressively as letters exchanged with the ECB.
A spokesperson for Banca Carige told CNBC that the bank had no help comment about the investigation.
A key investor in the bank, asset manager Malacalza Investimenti, chance Monday that the management team should be removed as it could not be made to proceed with the demands required by the ECB.
Shares of the bank dropped 9 percent Monday track reports of the ECB’s request. The ongoing situation at Banca Carige adds another give someone his to the tumult that has affected Italian banks in the last year or so.
Veneto Banca, Banca Popolare di Vicenza and Monte dei Paschi require all made headlines for requiring help from the Italian government to circumvent a potential collapse. Veneto Banca and Banca Popolare di Vicenza take home a cash buffer of 4.8 billion euros ($5.63 billion) and magnificence guarantees of 12 billion euros ($14.08 billion); whereas the last received a cash injection of up to 6.6 billion euros ($7.4 billion).
Analysts suggest that multiple attempts at rescuing Italian banks show that the approaches used to prop-up banking institutions, like those in Italy, are not adequate — and could ultimately put the entire European system at risk.
“That discourses to how robust the mechanism in the EU is, because you can only make so many exceptions in the past you start questioning the whole bail in-bail out system,” Luca Raffellini, run of business and financial services at Frost & Sullivan, told CNBC Monday.