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This article was published March 27, 2015 at 06:35.
suffering targeted
The initiatives
to reduce the weight of lots
Impaired “will allow
to free resources mainly benefit companies”
ROME
He returned to speak in the House after more than four years. The last time, however, Draghi was the governor of the Bank of Italy. This time is the president of the ECB and answers to the many questions of Italian parliamentarians that, although expressed in his native tongue, are not necessarily easy easy questions. So there is for example, who, as the Finance Committee Chair, Capezzone Forza Italy, asks: “Are you not afraid that the banking circuits of monetary policy transmission are dramatically clogged?”. Or who, as the deputy Pd Marco Cause, application through which channels should be able to get more credit to businesses. Draghi reassures. The quantitative easing program, explains, is already functioning: lending rates have begun to decline, and the dispersion in the Eurozone credit conditions is greatly reduced. “We are convinced that the monetary impulse will turn into more credit to the real economy . In fact, the forecasts of the ECB have grown significantly and we have specified that the new growth estimates are conditional to the full implementation of Quantitative Easing. ” Draghi then remember that there are those who objected that the Qe in Europe could work just because our financial system is bancocentrico. “It’s true – he admits – 80 percent funding in Europe be made by bank. But this also depends on the European industrial structure, which is made mainly of small businesses. These, to be priced on the market, they need greater transparency. Thus, although in the medium term, rightly, the European Commission’s objective is to promote their entry into the capital market, to date the structure of small and medium-sized enterprises “calls” necessarily a financial system based on banks’. However, he said Draghi, the Qe worked even in countries like the UK that has a structure similar to ours or Japan which is also similar to Europe from this point of view. And it worked, according to the president of the ECB, because the transmission channels are many: “There is a canal passing through the change in exchange rates; There are the long-term interest rates which have fallen much more than was expected two years ago. ” As for Italy, Draghi cited estimates made by the Bank of Italy who speak of a point of GDP growth in most deriving from Qe by September of 2016. “But the overall effects may be greater – he added – taking into account reactions in the confidence of households and firms and taking into account the fact that the estimates of the Bank of Italy were made two months before the month Qe departed. “
But Draghi yesterday also tackled other hot topics of Italian economic policy. He first pointed out that when a country has a two-digit unemployment rates, what is the greatest incentive to proceed rapidly with reforms that allow to increase the growth potential and we must take advantage of the improvement in the economic cycle to do it. Then, Draghi spoke of necessary reforms on the banking side, reiterating that a precondition for the capital can flow to businesses is the existence of a healthy banking sector, able to expand credit. “This means, in turn – he added – that loans must emerge rapidly deteriorated in the financial intermediaries and that measures are put in place for a rapid solution of the problem.” This process, said Draghi, has already started with the scrutiny ECB on the credit system. Today, he said, “the ECB looks favorably to new initiatives to reduce the weight of the impaired balance sheets of Italian banks; these reforms will free up resources especially for the benefit of business. ” And, on the sidelines of the hearing, he repeated to reporters “Of course, the ECB welcomes the bad bank in Italy.”
With the Italian bankers, however, Draghi was not tender at all. It took the cue of judgment on a reform just passed by Parliament, that relative to large banks, to make it clear that in our country the credit companies and their top managers are still too many. “On the banks – he observed – the ECB has given a favorable opinion. Personally – he added – I can only be beneficial to the developments that have been. Until some time ago, in fact, in Italy there were 750 banks. That means 750 boards, each with five members; a bank had even 19 “. This, again emphasized Draghi, is very expensive and these costs are paid by customers. “No doubt – he concluded – the argument for a consolidation of the banking system is strong.”
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