ROMA — «The ECB is moving with caution. It is understandable because if in the Eurozone inflation fell to 2.4% in March and in Italy to even 1.2%, in several countries the values are still high. But the declines are ripe and the market itself is telling us so. The June date seems reasonable to me».
Antonio Patuelli, president of the ABI, is preparing for the moment when banks will have to tighten their belts again by reducing profit margins. Whether it is up to Patuelli himself to manage the new phase, or to one of the potential successors (Gros-Pietro, Profumo or others): the renewal of the association’s top management is also set for June.
President, why did you say that the market has already decided that rates are about to fall?
«In addition to the evidence of inflation now tamed, ten-year BTPs are listed at 3.84% when a few months ago they yielded 4.99%. That is, they exceeded the official ECB rate of 4.5% downwards. And the banks offer loans with an Euribor of 3.89% and an IRS (Interest Rate Swap, reference interbank interest for fixed rate mortgages, ed.) of 2.75%. Nothing prevents the ECB from ahead of the Fed, indeed it will probably end this way given that inflation in America rose to 3.5% in March, the second consecutive month of increase, after falling to 3.1% in January”.
Italian supervisors are increasing banks’ capital requirements by 100 basis points for large systemic risks
Goodbye extra profits then, what does the Meloni government call them?
«Look, it was a fortunate combination if the feared supertax was converted into an allocation to reserves. If after many years of zero rates the sector experienced a brief phase of respite, it did nothing but strengthen its balance sheet. Luckily he was able to do so: on January 1, 2025, the Basel 3+ rules will come into force with a further need to increase equity capital. Furthermore, the Italian supervisory authorities, adapting to what has been done by almost all other European countries, are increasing banks’ capital requirements for large systemic risks by 100 basis points”.
Pandemic, war?
“Certain. Unfortunately, the conflicts that are fought so close to us, in addition to the humanitarian torment, are a very serious economic unknown. For Italy, I fear above all the Suez crisis: if the canal closes, our country will remain cut off from major international traffic.”
Draghi would be an excellent choice for the EU Commission. But even if he goes differently, it will be important to have an Italian commissioner as vice president
Do you share Mario Draghi’s call for a multi-speed Europe? And by the way: what do you think of the possibility of the ex-premier becoming president of the Commission?
«Draghi has acquired such prestige, competence and respect that he would be an excellent choice. But even if he were to go differently, and it will obviously depend on the outcome of the elections, it will be important to have an Italian commissioner with the qualification of vice president. The only time Italy was absent from economic portfolios was the five-year period 2014-19. They thought they had satisfied us by appointing Federica Mogherini as representative for foreign policy, a position that was little more than honorific. As fate would have it, banking crises broke out in Italy precisely in those years. With the aggravating circumstance that Brussels prohibited us from using the interbank fund, considering it a public relief tool: in the end, our appeals to the community courts proved us right, but by then the trouble was done.”
And multi-speed Europe?
«I would call it “enhanced cooperation”. Ultimately, the euro, the single supervision of banks and potentially the banking union itself are prototypes. Be careful, we are not talking about majority voting because in that case the minority would be forced into behaviors that they do not want to adopt. Strengthened cooperation means that those who want to proceed along a certain path do so without waiting for others. Anyone who has mistrust is not obliged.”
The journey on PagoPA was a bit bumpy, but in the end a formula that made sense was found
What could be done in practice?
«For example, the stipulation of codes that compulsorily regulate some sectors like ours. Then there is the big issue of the defense. We need to go back to the origins, to Alcide De Gasperi’s attempts, to understand how difficult it is to engineer industrial synergies in the sector, which would unfortunately be fundamental now.”
Finally, returning to our home, are you satisfied with the PagoPA node solution?
«It was a somewhat bumpy journey but in the end a sensible formula was found: Poligrafico takes 51%, the Post Office 49% with an absolute ban on using confidential information for the customers of its financial services. And to supervise everything, the antitrust authority. As it was in logic.”
PagoPA, the ABI against the sale to Poste Italiane: “This way you violate competition”
by Giuseppe Colombo, Aldo Fontanarosa
#Patuelli #time #ripe #ECB #rate #cut #markets #expect
– 2024-04-17 07:09:52
