Unicredit Won’t Be Going To The Italian Government For Funds, This Week

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Well it seems Guilio Tremonti was paying brinksmanship with someone last Friday, since according to Bloomberg this morning:

UniCredit SpA, Italy’s biggest bank, said institutional investors will buy its convertible bonds after its biggest investor, Fondazione CariVerona, said it wouldn’t subscribe to its share of the securities. Mediobanca SpA, UniCredit’s adviser on the transaction, “has fully confirmed the commitments taken in relation to the capital increase of 3 billion euros ($3.9 billion),” the Milan- based banks said in separate stock exchange statements late yesterday. It didn’t name the investors. CariVerona, which holds 6.08 percent of UniCredit, said on Feb. 7 that it wouldn’t subscribe to the sale of convertible bonds aimed at shoring up UniCredit’s finances.

So they’ve been able to complete the 3 billion euro bond sale. Thus they are alright for this week. But those East European defaults will still keep coming in, and at an ever accelerating rate, so this problem, and with it the problems for the Italian government, won’t simply go away. Which is why something needs to be done to stop the rot, and it needs to be done NOW:

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

One thought on “Unicredit Won’t Be Going To The Italian Government For Funds, This Week”

  1. “Which is why something needs to be done to stop the rot, and it needs to be done NOW:”

    Such as?

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