Italy for sale #4: how to became the owner of the Central bank and earn easy money

Great deals for Italian banks. The privatisation law of Bank of Italy was definitively approved yesterday. It brings huge earnings to the private banks holding the shares of the Central Bank nd the chance to buy new stocks for foreign banks, amongst the protest of minority groups in the Parliament. Notwithstanding the 262/2005 law which established the rules to bring the property back to the State, the Letta Government established the raise of the stock value from EUR 156.000 to 7.5 billion with the new law. Such value will enter the capital asset of the shareholders banks, giving a helpful hand in the view of the new ECB stress tests, and provide fresh cash to them.

The conversion law of the “IMU-Bankitalia” decree states in fact the obligation to reduce the amount of shares available to each investor below the limit of 3% of the Bankitalia capital. The Government will therefore pay 4.5 to the private banks to get the exceeding stocks back.

Another injection of money will come from the annual profit shares each year, amounting to 450 million euros against the current 60 million or so. Obviously, the decree is being strongly stigmatised by industry associations and welcomed by banks.

Another huge gap is flawed in the sovereign debt the Italian tax payers will have to pay somehow, and few wonder how this can happen. But this is Italy, the only Country in the world where the privatisation of public assets bring money to the buyers.