Italian banks worried about regulator‘s wellbeing

A rather shocking/ hilarious Reuters article on the aftermath of the ECB becoming regulator to European banks:

Touching on the issue of ECB representatives’ presence at banks’ board meetings, [banking lobbyist] Patuelli said this could get them in trouble if they proved unable to stop what later emerged as misdeeds. “A key legal principle is that not preventing something from happening is tantamount to aiding it,” Patuelli said.

“So I think it would be ‘prudential’ for the ECB not to send its representatives to board meetings because if decisions were taken that turned out not to be appropriate and ECB supervisors failed to promptly and effectively fight them, it could cause problems to the ECB itself.”

Not sure this needs a translation: „We don’t want you ECB guys to get hurt! Look, we have a history of taking naughty decisions. If you were present and things go pearshaped in future we‘ll have to point to you!“

An even better snip to understand the mindset is here - ‚we are entitled to risk-free profits no matter whether there is a crisis‘:

Further straining relations, the ECB has changed the terms at which it extends long-term loans to banks, depriving the sector of a source of risk-free profits at a time when consumers are wrestling with a cost of living crisis. Patuelli said it should not come at a surprise if Italian banks bought fewer domestic government bonds as a result.

Only in Italy, of course.

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Just what I was thinking “you have a very nice family. it would be a shame if something happened to them”

Steve

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