On December 22, Carige’s shareholders blocked a plan to raise equity, throwing the bank’s already shaky prospects further into doubt.
Then on Wednesday, with a majority of the board throwing in the towel, the ECB appointed the freshly resigned CEO and chair to continue to run the bank and try once more to strengthen capital.
The ECB is still willing to give Carige the benefit of the doubt, despite the repeated failure of attempts to access the market and the merry-go-round of board members who join, disagree with the shareholders, and leave.
That patience has not been shared by anyone in the private sector who could actually save Carige. Investors, aside from other Italian banks, have refused to put in new capital. And those banks have so far refused to merge with Carige, seen as the ultimate aim.
An eventual resolution or liquidation looks more and more likely. In that scenario, a knight in shining armour will be harder to find than it would have been several months ago.
Last week the bank paid back subordinated bondholders, who might expect to lose out if the bank goes under, upon maturity of their notes: another €135m taken off the table.
The ECB’s manoeuvre this week is called an “early intervention” under the bank resolution and recovery framework.
But what sort of intervention is allowing Carige to pursue the same old failing strategy. And by what possible definition is this early?