Blind faith turns to disbelief in Italian banking's heartland

Tue Apr 26, 2016 8:47am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Valentina Za

VICENZA, Italy (Reuters) - Until very recently, Domenico Bertini, a machinery technician nearing retirement, viewed his local bank in the picturesque Vicenza region of northern Italy as family.

The 150-year-old Banca Popolare di Vicenza was a world away from the faceless bankers of Wall Street who brought the global financial system close to collapse almost a decade ago. It was a traditional, safe institution staffed by Bertini's friends. Or so he and many others thought.

What remained of their extraordinary faith in the bank has now turned to anger and disbelief, with grave implications for Italy's banking system, which is funded to a large extent by ordinary people via bonds and shares as well as deposits.

Popolare di Vicenza -- in financial straits and under investigation for misselling its own shares to clients, false accounting and deceiving regulators -- revealed last week that many of its customers' life savings would be all but wiped out.

For Bertini, aged 56 and with two children, it was a personal betrayal.

"These are people you used to play football with when you were 15 and maybe their father was your school teacher," he said to explain why he had not only deposited money at the bank but also put his retirement savings, 400,000 euros ($450,000), in its shares.

"You meet them in the town square every day, you meet them in church. You trust them. They tell you to buy the bank's shares, you do it," said Bertini, sitting in a cafe in Vicenza, a Renaissance-era town at the foothills of the Italian alps, a ream of newspaper clippings and correspondence on the table.

Bertini is among thousands of customers who have lodged legal claims against the bank and official investigations are under way into several former executives.   Continued...

Domenico Bertini reads a letter from Banca Popolare di Vicenza in his house in Lonigo, near Vicenza, Italy, April 23, 2016. REUTERS/Stefano Rellandini