Bank of Italy preparing to revalue capital-official
ROME, Sept 6
ROME, Sept 6 (Reuters) - The Bank of Italy is preparing to present a revised valuation of its own capital which will impact the value of the holdings declared in the balance sheets of its shareholder banks, a top central bank official said.
Salvatore Rossi, deputy governor of the Bank of Italy, told business daily Il Sole 24 Ore in an interview published on Friday that the new estimate would probably be presented this month as part of a reorganisation intended to extend the number of shareholders.
The Bank of Italy's capital is divided into 300,000 shares held by some 60 banks and insurers which hold stakes which vary according to their size. Rossi said the shareholder base had become too concentrated over time.
"This is the element which needs to be resolved and last month the government officially requested the Bank of Italy to provide a correct valuation of its own capital," he said.
He said the estimate would be different from an overall valuation of 23.5 billion euros ($31 billion), combining capital and central bank reserves, used by some banks to calculate the value of their own holdings in the central bank's capital.
"There are varying valuations contained in the balance sheets of the participating banks," Rossi told the newspaper. The figure of 23.5 billion euros, equivalent to the total of capital and reserves, is not a correct figure to use in an estimate of the overall value of the shareholdings," he said.
Reserves were built up through central bank activities including printing money. "That is a public function, confined to central banks, on which shareholder banks can have no claim," he said.
The new valuations would stop banks from including central bank reserves in the valuations of the Bank of Italy shareholdings contained in their own balance sheets, he said.
Asked why the central bank, which oversees the banking sector, had not previously blocked banks from doing so, he said: "Because we could not use any explicit or generally accepted norm. The moment for providing such a norm has come." ($1 = 0.7623 euros) (Reporting By James Mackenzie)
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