Very few people have noticed it but readers of this blog will be aware of an event that recently took place in Italy, when Unicredit launched a capital increase on the market.
The bank edited a 300-page leaflet which sums up all risks for the investor and on page 66 you can read the following:
Furthermore, concerns that the Eurozone sovereign debt crisis could worsen may lead to
the reintroduction of national currencies in one or more Eurozone countries or, in
particularly dire circumstances, the abandonment of the Euro. The departure or risk of
departure from the Euro by one or more Eurozone countries and/or the abandonment of the
Euro as a currency could have major negative effects on both existing contractual relations
and the fulfilment of obligations by the UniCredit Group and/or customers of the UniCredit
Group, which would have a significant negative impact on the activity, operating results
and capital and financial position of the Group.
My take:
To my knowledge this is the first time that a bank explicitly warns investors of such a risk. What I find remarkable is that the debt crisis led to several positive consequences.
First of all we stopped dreaming about a future based on borrowed money. Governments are now reducing expenses to make sure future generations don’t have to repay huge amount of debts.
Second firms are starting to “go back to the roots” of their business and in a way have stopped dreaming too and have stopped letting their customers dream of an unrealizable future. My opinion is that this crisis carries with it a wave of transparency that can only serve the customer.
It’s time to realize that a new –hopefully bright- future opens up. I want to believe that the painful decisions that were taken at government level in European countries will be fruitful in a decade or so. The crisis revealed myriad inefficiencies in our economies and we may hope that courageous political leaders will resist the temptation of debt and will eventually invest in long-term well-being.
Posted in Strategy.
