Part IV Conduct and Culture, 21 The Venetian Banks’ Collapse

Subject(s):

Regulation of banks — Investment business

This chapter looks at the collapse of two Venetian banks: Banca Popolare di Vicenza (BPVI) and Veneto Banca (VB). Both BPVI and VB were declared insolvent by the European Central Bank (ECB) on June 23, 2017. They became insolvent after a prolonged period in which they sought to raise, by any means, fresh capital in order to sustain their lack of profitability and the capital thresholds provided by the ECB. The Venetian banks' case is extremely interesting at a European level for many reasons. It is a great corporate governance and public enforcement fiasco. Moreover, it is probably the most significant misselling case of Italian financial history, at least of the last decades. The chapter then describes the story of BPVI, the largest of the two banks and the one whose failure created the larger wave of surprise.