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The Criminal Court on Compensation for Judicial Error: Judgment No. 36209 of 2024

The recent ruling of the Court of Cassation, Section V, No. 36209 of 2024, has raised important questions regarding the criminal liability of the administrators of a liquidating bank and the consequences arising from imprudent decisions in the granting of loans. The analysis of the ruling offers insights into the balance between individual and collective responsibility in the field of banking management.

Context of the Ruling

The ruling examines the cases of A.A. and B.B., respectively the President and a member of the Board of Directors of the Banca Popolare dell'Etruria e del Lazio (BPEL). Both were accused of crimes related to the granting of loans without adequate guarantees and in the absence of thorough investigation. The Court of Appeal of Florence had partially reformed the first-instance decision, confirming however the responsibility of B.B. and annulling without referral the sanctions against A.A.

The ruling highlights the need for careful evaluation of banking operations and the associated risks, emphasizing the specific responsibilities of non-delegated administrators.

Legal Issues Raised

B.B.'s appeal raised various grounds, including the erroneous interpretation of the constitutive element of the alleged crimes. The Cassation clarified that manifestly imprudent operations are not only characterized by a high risk but must also comply with the diligence and information obligations set forth in the Civil Code (art. 2381 and 2392). In this case, it was confirmed that administrators must ensure prudent and informed management, even in the absence of specific delegations.

Implications for the Banking Sector

The ruling serves as a warning for the administrators of credit institutions. The Court emphasized that the imprudent management of funds, especially in crisis contexts such as that of BPEL, can have significant criminal repercussions. Administrators must be aware of the consequences of their decisions and the necessity to adopt adequate oversight measures. The implications of this ruling extend beyond the specific case, influencing governance practices and responsibilities in the banking sector.

  • Relevance of prudence in granting loans
  • Obligation of oversight for non-delegated administrators
  • Possible criminal repercussions in the event of imprudent management