The break-up: Why European banks can no longer rely on retail investors
Scandals and losses are ending the co-dependency between European banks and retail shareholders, highlighting the conflict of interest in relying on depositors for capital – and showing up a barrier to Europe’s new bail-in framework. A less parochial, more austere but more accountable era is just beginning.
|In this story|
|• A tale of two capital raisings: what Italy shows about the future of banks' investors|
|• Four million Santander shareholders: why retail matters for Europe's biggest banks|
|• Regulators tighten the screw: how marketing shares and sub debt to retail is getting a lot harder
|• Threat of catastrophe: can banks avoid conflicts of interest?|
|• Sleeping partners: how a remunerative shareholder democracy proved to be a sham
|• Downward path: why the shift to institutions is self-reinforcing
|• Bankers play to the peanut generation|
A tale of two capital raisings
In a last ditch attempt to pull off a €500 million rights issue last year, Paolo Fiorentino embarked on a local media blitz in Banca Carige’s home region around Genoa. Persuading local people – many of them customers of the bank – to follow main shareholder Vittorio Malacalza and take up their rights, was a key part of saving the mid-tier Italian lender.
“We worked very much in the local constituency… leveraging the traditional channels,” Fiorentino told Euromoney shortly after the deal closed, when he was still chief executive.