Italy's Aigis Banca in Milan is the latest victim of the Greensill debacle.
Italy's central bank has ordered the liquidation of Milan bank Aigis Banca, which mainly served small and medium enterprises.
The «Financial Times» (behind paywall) reported that Banca Ifis, a competitor, will take over the bank's books and commitments for the symbolic price of 1 euro ($1.23).
Germany's Bafin Alarmed Italy
Aigis Banca appears to have bought sizeable securitized investments from now insolvent Australian-U.K. firm Greensill Capital, including ones for GFG Alliance. Steel magnate Sanjeev Gupta owns GFG and is a significant Credit Suisse debtor as a result of the now-closed Supply Chain Management funds co-managed with Greensill. GFG itself is fighting for survival after Greensill's collapse.
Ironically, Gupta ostensibly wanted to buy a stake in Agis Banca last year. At that time it was called GBM Banca. Germany's Federal Financial Supervisory Authority (BaFin), which investigated the extensive loans that German Greensill Bank made to Gupta, alarmed Italian colleagues in October last year as well as the European Central Bank (ECB).
Deposit Insurance Coughs Up
But the regulators were too late. Greensill collapsed in March and Credit Suisse has to closed funds with about $10 billion in assets in them. In Germany, Greensill Bank was liquidated and a criminal investigation was started against management.
Aigis Banca made it to May. But the forced sale now required the support of Italy's Deposit Insurance to the tune of 49 million euros ($60 million).
