Will this Drag Draghi Down?

Mario Draghi, the President of the European Central Bank, was previously Governor of the Bank of Italy. He served in that role from December 2005 to October 2011. He assumed his role at the ECB in November 2011.

During his tenure at the Italian Central Bank he will have been aware of some ‘issues’ at some Italian banks. Indeed the systemic rot that is at the core of Italian banking system now can be traced back to well before the banking crash in 2008 – when Mr Draghi was at the helm of the Italian central bank. After all, the central banks across Europe, one supposes, would have been notified of systemic risk when it became obvious. Or so one would think.

Just a week ago, the Irish MEP, Luke Flanagan, made a particular point of asking Mr Draghi whether he was aware of fundamental liquidity breaches made by an Italian bank subsidiary in Dublin, Unicredit Italiano Ireland. As Unicredit is Italy’s biggest bank it would seem very likely that fundamental liquidity breaches by that Irish subsidiary – so fundamental that they almost brought down the entire European banking sector – would have been communicated to Draghi. Moreover, Unicredit – on Draghi’s watch – was never sanctioned.

Unicredit Dublin’s Risk Manager, Jonathan Sugarman, has now gone public and has written a book spilling the beans. He also gave evidence to the GUE/NGL Group in Brussels.  The video is below.