In the 19th century Charles Albert of Sardinia lost a battle against Austria, signed a peace agreement, broke that agreement, then lost in battle again.
Another of his legacies was to establish Cassa di Risparmio di Genova, now known as Carige. Whether that entity can fare better in its dealings with a power from the north is about to be seen.
Carige has until the end of November to give the European Central Bank a new capital plan, after failing to dispose of assets and raise tier two debt earlier in the year, and the supervisor has suggested it consider a merger.
The bank is in breach of its total capital requirement, and Moody’s has already warned that a failure to restructure could lead to a resolution.
Some may see this as a manufactured crisis. The requirement itself and the ECB’s warnings put the bank under stress it would not otherwise suffer, at least not yet.
But this misses the point. Capital ratios show whether a bank is too leveraged for the assets it holds. Carige clearly is, and stands apart from other Italian lenders who have taken advantage of favourable debt and equity market conditions and a developing buyer base for their assets, partly aided by a state guarantee scheme.
Even with a new board, it is hard to see how things will get better for Carige if it cannot turn itself around this year, given where Europe is in the economic cycle and the Italian political situation.
Letting it stumble on will only store up trouble for later; regulators would be within their rights to step in.