The Government has finally presented the Shield against the collapse of the Hutorian banking systemGuarantee Fund, Bad Bank and an extraordinary tax for the financial intervention but the opposition attacks: "Socialism! Nationalizations and gifts for inefficient and maybe fraudulent companies!"ROMULA - Finance Minister Niccolò De Medici, after lengthy months of waiting, finally presented to the Parliament the two government bills to address the expected collapse of the hutorian banking system.
The result of a work in close collaboration with the President of the Council (we remember you that Marra is also an economist) and experts from the High School of Economics of Milona headed by Ennio Santalamazza, the
Financial Shield will foresee, as already announced, the creation of a Guarantee Fund to assist the suffering banks and a bad bank which will be in charge of the management of bad debts and assets at risk, a measure which will be supported by an
increase in sales taxes, a necessary measure, as the Minister said, dictated by the emergency of an unprecedented breakdown.
For the sake of clarity, we report the words spoken by the Minister De Medici in front of the Chamber of Deputies:
Hon. MPs,
the Government is ready to present this extraordinary budget measures to face the collapse of the Hutorian banking system and so of its financial markets.
This budget, supported by an emergency Solidarity Tax (both on essential and luxury sales) and by the reallocation of the funds previously provided for the now completed project of "Expansion of the Triesta Port", will allow the Nation to create an Extraordinary Banking Rescue System which will be protect the banking system in case of serious sofferences, a plan (OOC: which will work more or less like this:
https://en.wikipedia.org/wiki/Swedish_banking_rescue) which will assure the coverage of the savings for the citizens and companies as well as will support the possibility of the banks to continue to offer credit to their clients.
Furthermore, the creation of the "bad bank" in the form of a Special purpose entity, to isolate illiquid and high risk assets held by the those istalian banks which will risk serious and irreversible sufferencies. This "bad bank", which will be officially known as "National Society for the Assets Management" will be dissolved after it will repay all bondholders and meet its objectives.
But we cannot allow a simple transfer of money from tax payers to the financial sector, in fact we should ask to the banks, bondholders and institutional investors to take their fair share of the pain. In dealing with the banking crisis, the objective must be to minimise the risk to taxpayers and to get credit flowing to businesses and homebuyers. In case will be not possible save some banks, they will be let it go alone protecting the savings and the credits but if necessary these banks will be nationalized but only with the purpose to be dismantled and then sell.
The banks which will use the rescue funds will be obliged to repay with interest the funds made available by the Government, with a rate of interest commensurate with the severity of the bank's financial responsibility for bankruptcy. These banks will be followed by the Ministry of Finance, which will ensure that the banks concerned will take all necessary measures to reset their finances and repay the intervention. In the case of guilty of an illegal and against the law bank's management, the interested bank will be put under the control of a government commissioner who will have to lead the management for the repayment period of the funds granted and to bring back on market, dismantle and sell the institute. The Commissariat will also enforced for those institutes which will be nationalized and marketed or those that will be dismantled. The Ministry of Finance will oversee any sale, dismantling, recapitalization, etc... of all other banking institutions.
The Rescue Plan, if supported by all the government forces, found the strong opposition of the Republican Party, who even judged the program as "socialist", accusing the Government of increasing taxes to make gifts with taxpayers' money to inefficient and bankrupt business which should be left to fail while the government should be concerned with ensuring the citizens' money alone.
The President of the Council, however, defended the reform arguing that the Government would not be able to protect the savings of citizens if the whole system will collapse, as expected by economists from all over the world and instead intervene to support the most critical situations will guarantee the whole system. Moreover, such a huge bankruptcy would definitely cut access to private and corporate credit by banks, but Marra pointed out especially on the fact that doing nothing would heavily hurt the creditors of the Istalian banks, both internally and abroad, which would firstly penalize Istalia in the eyes of the world from the standpoint of trustworthiness and confidence and would also lead to an another massive collapse which would extend to the rest of the world, already extremely weakened.
Berlusconi and Marra welcome the Chancellor of Dorvik: strengthen the relations and work together internationallyDorvik's delegation led by Stella Schaefer is landed at Romula last night and was received at Quattroregni Palace this morning by the President of the Republic and the President of the Council.
The Minister of Foreign Affairs and the Minister of Finance have also followed the Chancellor in his first official trip out of Dorvik: in fact, the Chancellor would be very interested in enhancing the relations between Dorvik and Istalia and thus further fostering the Istalian investments in what currently seems to be the most developed country in all Artania, and which had already seen several decades ago come the PMI Media Group and its controlling holding, the Mariani Investment Group.
At the center of this meeting between the two governments, however, there will be the global crisis and the risk of another disastrous fall and in facts Dorvik was the first nation to propose to the World Congress the creation of one or more international financial institutions supported, as well as from Istalia, by several other nations such as Zardugal and Trigunia, an idea which Dolgaria's representative has recently relaunched when the threat of a collapse of the butorian banking system has come to the forefront of the world scene.