Italy’s government and central bank are moving to eliminate the country’s cooperative banks. New rules virtually require holding companies to have at least €1 billion in capital. If all of the country’s cooperative banks merged, the new size requirement would seemingly result in just three cooperative banks in the country. All would be in the same financial distress that currently affects Italy’s larger banks. At that point, the government could look for a pretext to eliminate the cooperative banks entirely, most likely by merging them into another bank.
Raising capital: Deutsche Bank has final approval to sell its ownership share in Chinese bank Hua Xia.
Pennsylvania is the latest state to suspend Wells Fargo from state business. Investigations into the bank’s ghost-account scandal have expanded, with evidence suggesting that the bank’s fraudulent practices extended into its brokerage and that the bank retaliated against former employees who had objected to the fraud scheme. The bank confirms that the SEC is investigating the bank’s public statements about its marketing practices, many of which are now known to be false. The bank’s auditor, KPMG, is also facing an investigation. The auditor knew of the pattern of fraud but concluded it was immaterial, and regulators are asking if that was a reasonable conclusion.