31/5/2012 00:00:00
According to the Governor of Bank of Italy, Ignazio Visco, the increase in tax pressure has reached levels that are now incompatible with sustained growth; for this reason it is necessary to expand the recovery of tax evasion and cut spending fairly. It is necessary to find, in addition to larger evasion recoveries, spending cuts that compensate for the necessary reduction in the tax burden. The governor believes that if carefully identified and inspired by equity criteria, in fact, the cuts will not compromise growth; they will be able to contribute to stimulating it if they are aimed at removing inefficiencies in public action, simplifying decision-making processes and containing administrative burdens. Since the beginning of the crisis, the Governor observes, Italian banks have made considerable progress on the path to capital strengthening; they resorted to the market in difficult circumstances. In recent years, Visco acknowledges, the stability of Italian banks has been ensured by a set of factors: low exposure to structured finance products; supervisory rules and controls aimed at avoiding excessive risk-taking; limited financial leverage compared to other European banks; a high weight of capital instruments effectively capable of absorbing losses. However, he recalls, the credit system is suffering the repercussions of two strong recessions in three years and tensions on sovereign debt. In this context, to strengthen assets it is necessary to increase self-financing. According to Visco, the current level of labor costs is hardly compatible with the growth prospects of the Italian banking system, even the remunerations of directors and senior management must be directed towards the objective of cost containment. They talk about the new parameters imposed by Basel 3, the Governor highlights that higher capital levels strengthen the stability of banks, their ability to provide credit even in difficult conditions. The consistency between capital endowment and asset riskiness is confirmed as a cornerstone of the regulatory system. The Bank of Italy, Visco reminds us, is attentive to the need to ensure substantial correctness in relations between banks and customers. To this end, “it has strengthened cooperation with other sector authorities; ensures the intense operation of the Financial Banking Arbitrator; has refined its surveillance of intermediaries.
