Italy's Gold


Oh ok. But most of Basel III has already been implemented by now, and the markets have long expected the banks to report their figures under Basel III since 2013. Certainly for the Irish banks.

Of more immediate interest may be Draghi’s dictates around Italian gold:

Italy’s populist de facto leader Matteo Salvini seems set on shaking Europe’s financial establishment to the core.

One day after the Italian deputy prime minister and leader of the League party, called for the elimination of Italy’s central bank and the country’s financial regulator, Consob, saying the two institutions should be “reduced to zero, more than changing one or two people, reduced to zero”, or in other words eliminated, and that “fraudsters” who inflicted losses on Italian savers should “end up in prison for a long time”, Salvini prompted fresh shocked gasps in Brussels and Frankfurt when he raised the possibility of seizing Italy’s massive gold reserves away from the country’s central bank.

“The gold is the property of the Italian people, not of anyone else,” Salvini said in comments to reporters on Monday, [according to the FT]

Countries must seek ECB approval to manage gold reserves: Draghi

FRANKFURT, March 28 (Reuters) - The European Central Bank needs to approve any operation in the foreign reserves of euro zone countries, including gold and large foreign currency holdings, the ECB’s President Mario Draghi said on Thursday.
“The ECB shall approve both the operations in foreign reserve assets remaining with the NCBs (national central banks)…and Member States’ transactions with their foreign exchange working balances above a certain threshold,” Draghi told two Italian members of the European Parliament.

Britain leaving the European Union.

As I was saying - watch the Gold (anywhere).


Italy revives ‘alternative currency’ proposal
Debate is growing in Italy about the suggestion that a new domestic currency could be introduced by the government to pay its debts — and the possibility that Rome’s Eurosceptic coalition might use it to facilitate the nation’s departure from the euro.

Prominent members of deputy prime minister Matteo Salvini’s ruling League party have floated the proposal — which was endorsed by a vote in the Italian parliament last week. But how would it work, and how likely is it to happen?

What is this parallel currency idea?
The Italian government should issue debt in small denominations which can change hands as a medium of exchange — that, at least, is the view of key advisers to Mr Salvini.
Claudio Borghi, one of the League’s most influential economic advisers, has championed the idea, as has Alberto Bagnai, president of the finance committee in Rome’s Senate. Mr Borghi, who has been strongly critical of Italy’s membership of the single currency, is president of the budget committee in the lower house of Italy’s parliament.

The proposal involves creating a new type of Treasury bill — dubbed mini-bills of Treasury (mini-BOTs) — which could be used by the government to pay the arrears it owes to commercial businesses, and by citizens to pay their taxes, Mr Borghi has suggested.

Thus it would have the scope to grow into what would in effect be a parallel domestic currency, separate from Italy’s official currency, the euro.

The idea received wider attention last week when markets took fright after the Italian parliament passed a vote calling on the government to consider using mini-BOTs as a way of paying its debts to suppliers.

The introduction of what could in effect constitute a parallel domestic currency would undermine Italy’s membership of the euro, Marcello Messori, director of the school of European political economy at Luiss University, said: “The issue of mini-BOTs is a way to facilitate the creation of a double monetary circulation.”
Riccardo Puglisi, an economist at the University of Pavia, said the proposal was “a way to facilitate the exit of Italy from the eurozone”.
That would leave Italy in breach of European treaties, some argue.

“A legal tender can only be made by law, but this would contravene the treaty on the euro,” according to Lorenzo Codogno, a former chief economist at the Italian Treasury.**
The Bank of Italy has rejected that suggestion on the grounds that “since it would not be legal tender, it would not violate the provisions of the European treaties regarding money issuance”.
“No one wants it to be made legal tender now. There is no uncertainty about that,” said Mr Codogno. “Still, once in circulation it could become legal tender in the future.”

Although last week’s parliament vote ramped up investors’ concerns, it had little meaning in legislative terms, analysts say. The motion was not binding and it was only an indicative vote — a fairly common event in Italy’s parliament.

“[These] motions have no practical implications,” said Mr Monacelli. “They are suggestions to the government, nothing more.”


What business would want to be paid for services rendered in a government IOU?

Italians love the idea of depreciable debts but they’ll keep their savings in a currency their own government can’t devalue.