CICR Deliberation No. 242 of 22 February 2006: Transformation of Maturities and Partial Repeal of the Minister of the Treasury Decree of 22 June 1993

Interministerial Committee
for Credit and Savings
Secretariat

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DELIBERATION 22 February 2006
Transformation of maturities. Partial repeal of the Decree of the Minister of the Treasury of 22 June 1993 “Despecialization of credit institutions: medium-to-long-term operations”.

THE INTERMINISTERIAL COMMITTEE FOR
CREDIT AND SAVINGS

HAVING REGARD TO Legislative Decree 1 September 1993, No. 385, containing the “Consolidated Text of Laws on Banking and Credit Matters - TUB”;

HAVING REGARD TO Article 4, paragraph 1, of the TUB, which establishes that the Bank of Italy, in the exercise of supervisory functions, formulates proposals for deliberations within the competence of the CICR, as provided for, among other things, in Title II of the same consolidated text;

HAVING REGARD TO Article 53, paragraph 1, letters b), c) and d), of the TUB, which assigns to the Bank of Italy, in conformity with the deliberations of the CICR, the task of issuing provisions of a general nature aimed at containing risk in its various configurations, the shareholdings that may be held, and administrative and accounting organization and internal controls;

HAVING REGARD TO Article 67, paragraph 1, letters b), c) and d), of the TUB, which, in order to achieve consolidated supervision, grants the Bank of Italy, in conformity with the deliberations of the CICR, the power to issue to the parent company, through provisions of a general or specific nature, directives concerning the banking group as a whole or its components, aimed at containing risk in its various configurations, the shareholdings that may be held, and administrative and accounting organization and internal controls;

HAVING REGARD TO Decree No. 242630 - issued by the Minister of the Treasury on 22 June 1993, following a CICR deliberation - on the subject of “Despecialization of credit institutions: medium-to-long-term operations”, and specifically the paragraphs:

• “1. Risks related to the transformation of maturities”, which provides that banks and banking groups must implement all appropriate measures to prevent and manage the various risks arising from a high degree of maturity transformation, adhering to the instructions issued on this matter by the Bank of Italy;

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Interministerial Committee
for Credit and Savings
Secretariat

• “2. Medium-to-long-term credit”, according to which the Bank of Italy sets criteria aimed at regulating the possibility of operating significantly in the medium-to-long-term credit sector for businesses according to a logic of gradualness;

• “3. Balancing of maturities”, which establishes that banks and banking groups must take care to contain the use of short-term funds to finance medium-to-long-term activities, and that for this purpose the Bank of Italy establishes rules aimed at containing investments in real estate and shareholdings within the amount of equity funds, as well as correlating the amount of medium-to-long-term assets, also considering their liquidity, with liabilities characterized by constraints on repayment or generally by a sufficient degree of stability;

HAVING REGARD TO Decree No. 242632 - issued by the Minister of the Treasury on 22 June 1993, following a CICR deliberation - on the subject of “Shareholdings held by credit institutions and groups”, which in paragraph 1, second paragraph, establishes that the total amount of investments in shareholdings and real estate may in any case not exceed the limit of the supervisory capital;

CONSIDERING that innovation and the development of financial markets, the diversification and stabilization of funding sources, the evolution of organizational structures and risk measurement and control techniques, and the experience gained in the credit sector beyond the short term for businesses allow banks and banking groups to autonomously manage risks related to the imbalance of financial flow maturities and the financing of productive investments;

CONSIDERING that the reasons underlying the rules issued at the time to limit the transformation of maturities and medium-to-long-term credit are no longer valid in the current operational and market context, while maintaining the necessity for banks and banking groups to have an organizational structure and internal controls suitable for controlling and managing all risks related to their activities, including liquidity and maturity transformation risks;

ON THE PROPOSAL formulated by the Bank of Italy;

D E L I B E R A

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3.

Interministerial Committee
for Credit and Savings
Secretariat

ARTICLE 1

1. The following paragraphs of the Decree of the Minister of the Treasury of 22 June 1993, No. 242630, on the subject of “Despecialization of credit institutions: medium-to-long-term operations” are repealed:

• paragraph “1. Risks related to the transformation of maturities”;
• paragraph “2. Medium-to-long-term credit”;
• paragraph “3. Balancing of maturities”.

2. It remains established that the total amount of investments in shareholdings and real estate may in any case not exceed the limit of the supervisory capital, as provided for by the Decree of the Minister of the Treasury of 22 June 1993, No. 242632, on the subject of “Shareholdings held by credit institutions and groups”.

ARTICLE 2

This deliberation, which will be published in the Official Gazette of the Italian Republic, enters into force on the day of its publication.

Rome, 22 February 2006

THE PRESIDENT
G. Tremonti