Italian bankers used to be seen as pillars of the community. No longer
of Monte dei Paschi di Siena is a torn and yellowing sheet of paper: a death sentence from the 15th century, handed down for trying to steal gold from what may be the world’s oldest bank. Monte Paschi’s archivists now have another historic sentence for their files. On November 8th a court in Milan convicted former executives for hiding vast losses from derivatives transactions a decade ago, in collusion with bankers from Deutsche Bank and Nomura.
Thirteen people were convicted, including Michele Faissola, Deutsche Bank’s former global head of rates, and Sadeq Sayeed, Nomura’s former chief executive for Europe. Giuseppe Mussari, Monte Paschi’s former chairman, received the heaviest sentence, of seven years and six months. Deutsche Bank and Nomura were fined a total of nearly €160m . Monte Paschi, which was nationalised in 2017 as its losses spiralled, had already settled.
Taxpayers who have stumped up for three state bail-outs for Monte Paschi in less than a decade may rejoice—at least briefly; sentences in Italy are often cut, and convictions overturned, on appeal. Nevertheless, these ones signal a shift in sentiment. Italian bankers used to be seen as pillars of the community, not least because of the community projects they funded. No longer. In anpoll published in September, Italians ranked bankers as among the most untrustworthy professionals.
Part of the reason is scandal—at Monte Paschi and, allegedly, several other banks. Moreover, past reckless lending and political interference have created a mountain of problem loans, worth €340bn at its peak in 2015. Monte Paschi remains weighed down by €14.5bn of bad loans, complicating the government’s plan to sell its stake by 2021.
As the Milan court was reaching its verdict, a group of lawyers met in Venice to discuss the social costs of banks’ attempts to rid themselves of bad debts and non-performing loans. One of them, Andrea Arman, has joined the populist Five Star Movement—because of his anger at bankers’ corruption, he says. He cites locals who receive letters daily from debt collectors.
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