Scope Ratings says time has come for governments to dispose of their stakes in banks
There has been no shortage of complaints about the structural weakness of the European banking sector. While the US banks were soon bursting with energy again, after temporarily using taxpayers' money to recover from the financial crisis that they caused, many European banks are still partially state owned, and are often considered to have been left behind. The hope that a much-trumpeted wave of consolidation would provide a remedy has yet to materialise.
Sneak attack
Against this background, Marco Troiano, banking industry analyst at the Berlin based rating agency Scope, took a refreshingly impartial look at the actions of the major Italian bank Unicredit in a recent publication.
The bank's sneak attack on Commerzbank, as the federal government sold a package of its shares, is viewed as rather rowdy behaviour in the local financial sector, and probably also by Chancellor Olaf Scholz (SPD).
The general outrage has forged an interesting alliance, which has been joined not only by bank executives, but also by employee representatives, finance professors, small and medium-sized businesses, and trade union officials. Not to mention all those largely uninvolved people who either do not trust the Italians in principle, or do not trust their current government. Although many opponents of a takeover are actually ardent supporters of the free market economy, the newly cleaned up Commerzbank seems to awaken a kind of protective instinct.
Scope analyst does not agree
Troiano, whose surname does, of course, suggest Italian origins, does not want to join this chorus. Instead, the Unicredit example should set a precedent. In his eyes, European governments have delayed exiting their shareholdings for far too long. A bold sale of bank shares still owned by the state, and the courage to enter into cross-border mergers, have the potential to sustainably strengthen not only confidence in the sector but also in Banking Union, he writes.
