Moscow. June 7. INTERFAX.RU – the Banking crisis in San Marino can completely undermine the economy of the tiny state: the volume of NPLs in the Republic is much less than in other European countries, but they have already reached 113% of its GDP.
The Central Bank of San Marino plans to inject liquidity into the banks of the city-state that could be the first step on the road to full restructuring, writes the Times of Malta, citing a source familiar with the situation.
The total volume of problem credits of all six banks of San Marino is € 1.8 billion. The banking system of the enclave in Central Italy, where only 34 thousand people, a legacy of the days when he was a tax shelter for wealthy foreigners.
Like Italy, San Marino has still not fully recovered after the deep recession caused by the global financial crisis, during which the authorities of the Republic had to save the banks from collapse.
This time the government will prefer to create a separate Bank for all troubled assets, which are associated with residents of San Marino is about half the total volume of bad debts, said Finance Minister San Marino Simone Celli in an interview with Reuters.
He did not specify where the resources to restore liquidity to banks.
Meanwhile informed sources said that the Central Bank of San Marino intends to raise between 100 million and 150 million euros in June, which will focus on stabilization of the situation in the banking industry. At the same time the authorities will continue the search for a durable solution to the debt problem.
The government of San Marino will have to act quickly: while the state is not part of the European Union, although it uses the Euro and follows the rules of his treatment but by September 2018 is expected to transition to EU rules on state aid to troubled banks. The EU Directive requires that first, the cost of rescuing banks was attributed to private investors (bail-in), shareholders and bondholders, as well as the largest investors, and then brought public finances.
According to the Central Bank, six banks require additional capitalization in the amount of about 260 million euros, equivalent to about 20% of the country’s GDP, the sources said.
Last week, Fitch Ratings downgraded the sovereign rating of San Marino from “BBB” to “BBB-” – the last stage of investment level, a forecast of rating change is “stable”. The main reason for the rating action were the problems of the banking industry.