Italian banks must leave Russia said Fabio Panetta, the head of the Italian central bank.
Panetta, who is also a member of the Board of Governors of the European Central Bank (ECB), said this on the sidelines of the G7 summit (the world’s seven most advanced economies). Reuters informs about it.
According to Panetta, the continuation of the business of Italian banks damages their reputation, among other things.
Italy’s UniCredit has the second largest subsidiary in Russia after Austria’s Raiffeisen Bank International, while Intesa Sanpaolo is working to sell its business in the country.
“We have to get them out of there (from Russia),” Panetta told reporters during a news conference after a meeting of G7 finance ministers and central bankers in Stresa, northern Italy.
“There are objective difficulties because getting out of Russia is complicated, but you have to find a buyer even knowing that you are forced to do it and it can be expensive. But you have to get out because there is a reputation problem,” added Panetta.
Russia this month seized UniCredit’s assets worth 463 million euros in connection with the aborted gas pipeline project for which the banking group provided guarantees.
Both Intesa and UniCredit have repeatedly said that Western sanctions against Moscow have reduced the number of potential buyers, making it increasingly difficult to exit the country.
Last year, Intesa secured the presidential decree necessary for a foreign bank to divest itself of its Russian subsidiaries.
However, UniCredit, the largest Italian lender, is still working on its exit and is waiting for the green light from the Russian central bank and the Italian authorities.
UniCredit CEO Andrea Orcel has always maintained that the bank’s goal is to reduce its business in Russia while minimizing the consequences. According to Orcel, it would not be “morally correct to write off and donate” the Russian division of Moscow.
Both the European banking watchdog and US sanctions enforcement authorities are closely monitoring the activities of Western banks in Russia and their progress in exit planning, a source familiar with the situation said.
In addition to the green light from Moscow, each transaction must also be approved by the ECB. And to avoid the risk of sanctions, the US Treasury Department’s Office of Foreign Assets Control must also provide a letter of recommendation when notified of the potential buyer’s identity, the source added.
On Saturday, Panetta also commented on the ECB’s interest rate cuts and told reporters that the bank’s officials are increasingly leaning towards the possibility of starting to loosen monetary policy.
“It seems to me that there is a fairly general consensus on the possibility of rate cuts,” he noted, adding that inflationary risks are “reducing.” (TASR)