Banco Master and the limits of the FGC guarantee: when protection distorts risk pricing
Our partner Roberto Panucci was interviewed by Poder360 for a report compiling historical data on Central Bank interventions and the track record of the Credit Guarantee Fund (FGC).
Our partner Roberto Panucci was interviewed by Poder360 for a report compiling historical data on Central Bank interventions and the track record of the Credit Guarantee Fund (FGC).
More than the number of interventions, which have always been part of the system, the Banco Master case highlights a structural point: how the guarantee, when perceived as zero risk, can distort risk pricing at the moment of the investment decision.
Outlier episodes strain the limits of the protection model and put issues such as incentives, guaranteed funding and the sustainability of the bank resolution system back at the center of the debate.
