As Italy’s leading banks report their 2013 results, the impact of a change in the value of their holdings in the the Bank of Italy, the country’s central bank, are becoming clear. For UniCredit it provided an uplift of €1.4bn, badly needed in a year in which the bank lost €14bn. But there are questions about how the revaluation was calculated and whether it provides Italian banks with an unfair advantage against their eurozone competitors ahead of the forthcoming asset quality review (AQR).
The revaluation was made possible due to the Bank of Italy’s ownership structure. Whereas most central banks are wholly owned by the state, a handful are held by commercial banks (see chart 1) and some of these, such as the Greek and Belgian central banks, are listed as well.
