Italian banks have significantly reduced their exposure to national government bonds, reducing the share of public bonds present in the various portfolios by as much as 36 billion euro over the last year. Speaking in figures, the amount of bonds held by credit institutions has fallen from 375 to 339 billion, a drop of 9,6% in just 12 months.
This data is revealed by the Bank of Italy which specifies how, of the 36 billion taken into consideration, 27 are due to the so-called significant Italian banks, i.e. those subject to the supervision of the European Central Bank, 2 billion to the subsidiaries of foreign institutions and 7 to the remainder of the system.
Why did the sub-fund decide to reduce the amount of government bonds in its portfolio? The reasons are many: ranging from a general tendency to divest in public bonds to fears relating to public debt and the low growth of our country, passing through the quantitative easing of the ECB and the need to diversify risk.
Also counting the pressures coming from Germany which for some time has been placing the reduction of government bonds in the balance sheets of the various institutions as an essential condition for the realization of the Banking Union.
What is certain is that the Eurotower will soon also focus on the subject in view of the Basel Committee which will deal precisely with the changes concerning the legislation on government bonds in the context of the 2017-2018 programme. In a report to the EU Parliament, the Central Bank has already announced that any revision of the rules will not be based on quantity but on the effects on prices. Despite this, awaiting the changes, Italian banks have already begun to move towards a substantial change in investment strategies.
