According to reports, the collapse of the two banks wiped out savings of their combined 200,000 shareholders. In addition, the area’s 40,000 small businesses remain without access to financing as criticism mounts over regulatory oversight of the banks.
“The pain for Veneto’s banks may be over, but the pain for Veneto’s businesses is just beginning,” said Andrea Arman, a lawyer for some of the businesses and individuals hardest hit by the banks’ collapse, in a Bloomberg interview. “We’re just starting to see the consequences of the collapse and what we’re seeing is alarming.”
Reports noted the entity that is acquiring the $21.3 billion worth of “troubled” debt the two banks incurred, SGA, is not yet operational, putting many of the banks’ consumer and business customers in a holding pattern.
“Many of these borrowers are profitable companies, but they’re stuck in limbo,” said Mauro Rocchesso of financial firm Fidi Impresa e Turismo Veneto, which provides collateral to borrowing companies. “They don’t have a counter-party anymore and can’t find fresh capital from a new lender because of their exposure to the two Veneto banks.”
Some of the SMB owners affected spoke to Bloomberg about their experiences.
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One of them, Toni Costalunga, said he could not make payroll because the credit line he had with Veneto Banca was unexpectedly terminated last month after SGA took it over.
“I missed a few loan payments during the worst of the recession, but I never missed a payment to a worker or supplier until last month,” he told the publication.
