We are perhaps at the end of an almost idyllic relationship between German banks and the ECB. You must first of all know that while the ABI has a small office in Brussels with a handful of managers to maintain relations between European authorities and Italian banks, and this only for some years, on the contrary the association of the German Sparkasse, the only public savings banks, has a nice office with 15 employees engaged, from mane to evening, in a lobbying and continuous presence activity. So you understand why certain rules, such as those relating to NPLs, bank bad debts, seem written for German and not Italian use. Certain mistakes are paid.

However it seems that things are changing: as reported by Handelsblatt ECB and the German supervisor Bafin have asked for a substantial reform of the institutional protection scheme (Ips) which unites 378 German savings banks (Sparkassen) and the four main Landesbanken. The IPS is not considered as a single group but has total assets of 2,200 billion, more than any other European bank, a solution that is ultimately intermediate between that of the COOP Holding and the interbank guarantee fund, both solutions used in Italy

The scheme, Handelbaltt writes, ensures that the institutions participating in the IPS, although not formally constituting a single entity, support each other in the event of difficulties of individual subjects, but the ECB and Bafin, respectively responsible for supervising the banks significant have seen serious problems in the decision-making model, in internal controls and therefore also in capital security itself. Moreover, they are cross-linked issues: as the case of the Veneto Banks shows, a bad decision-making process influences the internal control methods, and without adequate internal control systems you have no certainty as to assets or liabilities. . Therefore, as reported by Handelsblatt, the two authorities in recent days have sent Helmut Schleweis, president of the Sparkassen association (DSGV), a letter signed by the heads of the ECB Patrick Amis and that of Bafin Raimund Roseler indicating the weaknesses on to intervene. Schleweis responded with openings but also criticisms to the observations of the authorities, who could make definitive decisions on the matter in the summer. Should we expect more lawsuits against the ECB that will end up in the Constitutional Court? The German financial system seems to be increasingly on a divergent path compared to the European authorities

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The article ECB AND SPARKASSE: END OF A PARADISE FOR THE GERMAN BANKS? Or a new rebellion comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Fri, 29 May 2020 17:26:27 +0000.