The Monte dei Paschi di Siena (MPS) bank crisis is slowly forcing the Glass-Steagall issue to the forefront. Even if the debate has not yet exploded, one notes that whenever someone introduces Glass-Steagall into a discussion, nobody dares oppose it.
At the MPS shareholder meeting yesterday, while world media were focused on the show delivered by comedian Beppe Grillo, little attention was devoted to a Member of the European Parliament who also intervened at the meeting, calling for an immediate implementation of Glass-Steagall. MEP Claudio Morganti, secretary general of the Lega Nord in Tuscany, said, "The reintroduction of Glass-Steagall, repealed in 1999, would allow for the separation of commercial banks from banks that engage in speculative and high risk activities. I wonder whether it is accidental that, after the repeal of Glass-Steagall, so many problems with derivatives and toxic assets started. The amount of junk assets being traded on financial markets is tens of times the size of world wealth. Derivatives are a weapon of mass destruction, and only after introducing a bill separating banks, can we proceed with identifying tasks and responsibilities."
Morganti called on MPS's CEO Alessandro Profumo "to get to work and sweep out those responsible for such a decline, but at the same time protect employees and rebuild MPS into a success story for Siena."
Morganti also said he is against nationalizing MPS, as someone is pushing. "I would never nationalize a bank such as MPS, which is full of toxic assets. Taxpayers would be forced to cover the losses and recapitalize. Such losses must be paid for by those who actually created them, without expecting Daddy State to step in. "
After having lost 20% of its stock price in three days, yesterday Monte dei Paschi di Siena was helped by an "invisible hand" which purchased stocks and drove their value up 11.36% in one day.
In a talk show on national RAI2 channel, former minister and candidate for a rightwing slate Giorgia Meloni even claimed that her slate "is the only party whose program calls for separating commercial banks from speculative banks." Her opponent, a free-market representative of the Democratic Party, Francesco Boccia, babbled that he agrees on that proposal. "We agree on finances, we disagree on the economy," he said.