Generalizing is wrong because it does not give the necessary light to the facts and therefore makes everything more opaque, preventing us from understanding how things really are. This is a simple rule that always applies in every area and is even more valid inanalysis of the functioning of the economy and the banking system, where generalization can produce further, useless and inevitable damage.
Unfortunately, this is what is happening in Italy these days marked by the succession of statements characterized mostly by unjustified but very harmful propaganda. Unlike the past, today the banking crises also concern Italy and, in most cases, they are explained by resorting to the category of "malgestion", i.e. attributed to incorrect or fraudulent corporate choices by their directors.
Naturally there have been such corporate decisions and no one can deny them. Tracing this motivation back to all the crises that have occurred is, however, wrong and counterproductive because, almost always, they instead have a macroeconomic nature and explanation. Stand, in fact, all crises were caused by incompetent or dishonest bankers it would be impossible to govern them without definitively losing the trust of savers in the banking system. If they depended on the weakness of the human being it would become impossible to explain them rationally and above all to solve and prevent them. We just need to resign ourselves and hope…
But things, fortunately, are different and we need to reconstruct the origin and the real reasons. The crises of European banks began after the outbreak of the global financial crisis linked to US subprime mortgages and structured finance which led to the bankruptcy of Lehman Brothers. In a very short time, the first banking crises, also in Europe, first involved the banks most exposed to financial transactions.
In Germany - but not only - the State intervened directly to save many of its banks collapse and bail-in legislation was introduced to avoid or reduce state intervention in bank bailouts. In Germany and the Netherlands, the bailouts cost more than 10% of those countries' GDP.
In that first phase, the business model typical of the Italian system and oriented towards traditional intermediation - collection of deposits to make credit - severely limiting financial investments, placed the banks of our country sheltered from the crisis. Not like that in 2009 when it was the Italian economy that suffered a strong recession to which another was added in 2012 fruit of the austerity policy imposed by Europe. Two harsh recessions from which there is still no exit and which have produced the phase of stagnation still in progress.
Inevitably the difficulties of debtors in repaying the loans received have grown, the Npl boom and, since 2015, the banking crises in Italy have become recurring. When a country suffers a collapse in GDP, as happened in Italy, of almost 10%, without having a prompt and robust recovery, when this collapse is concentrated in one part of the country with the South losing almost 20% (- 10% Puglia; -14% Abruzzo and Molise; -19% Campania; 18% Umbria; – 19% Calabria; -21% Sicily), how is it even possible to even imagine that the banking system is not affected by it? In an economic context like this, having bank failures is undoubtedly a painful but almost physiological event. And so – as the Governor of the Bank of Italy recently recalled – the state of extraordinary administration involved no less than 80 credit institutions, and involved joint stock companies, small, medium and large banks without any difference. It is quite natural that in such cases bank failures mainly depend on the negative macroeconomic context and not on bad corporate decisions. The case of bankruptcies that occur in favorable economic contexts is completely different. In that case, as is evident, the wrong or, worse, fraudulent choices of individuals in the management of institutions count above all.
Seeking responsibilities in the wrong choices of directors is obviously right and it would not even be necessary to underline it and, where those responsibilities are ascertained, it is right that they are pursued. However, if the banking crises are not read within the macroeconomic context which, as it is evident, was and is very unfavourable, we end up giving profoundly distorted information; the management of the same crises is complicated with further discredit on the entire banking sector, which is not only unjust but also very harmful and finally the foundations are not laid to avoid new ones.
