The Monte Paschi Crisis Could Be Good for Europe
But only if the UniCredit acquisition jumpstarts reform that Italy’s banking system needs. Already, there are grumblings among those invested in the status quo.
The Monte Paschi office in Piazza Salimbeni, Siena.
Photographer: Bloomberg/BloombergAndrea Orcel is making Italy’s bank bosses nervous. Chief executive officer of UniCredit SpA since April, he has been overseeing its mooted acquisition of the best bits of Banca Monte dei Paschi di Siena — a move that unsettles the status quo in the old-school world of Italian banking. It may well touch off a new season of mergers and acquisitions.
But that’s all good news in the years-long unwinding of Monte Paschi, the nearly 600-year old bank that was battered by the global financial crisis and has been bailed out by the government. It may just jump-start necessary changes in Italy’s overbanked, weakly profitable financial industry to reshape it for the post-Covid age. Better still, the Monte Paschi deal could set an example for other European countries where M&A has been blocked by bureaucratic and legal obstacles.