On 24 April 2019, Italy adopted a decree putting into effect a public scheme automatically compensating shareholders of failed banks with financial assets up to 200,000 euros or annual income up to 35,000 euros, who would not need to demonstrate they were victims of mis-selling. The Italian government has set aside a compensation fund of 1.5 billion euros.
We think that bail-in and the protection of retail investors who were victims of mis-selling are not incompatible. However, EBA and ESMA highlighted in a joint statement that in cases of bail-in, the BRRD does not provide for a different treatment of eligible liabilities based on the nature of the holder. We therefore call on the European Commission to analyse the compliance of the Italian decree with the European bail-in rules.
Please find our letter to Margrethe Vestager, EU Commissioner for Competition, here: Letter to Commissioner Vestager bail-in retail investors Italy