Banks will be able to cut bank rates on new loans to households and businesses by as much as 20 basis points thanks to the savings on funding they will have with the new ECB auctions called Tltro2.
This is the estimate contained in the Economic Bulletin published by the Bank of Italy
Via Nazionale hypothesizes that Italian banks will have recourse to the liquidity provided by the European Central Bank through the new auctions of approximately 200 billion (just under 100 net of repayments from the previous auctions) and that the liquidity thus obtained will replace part of the maturing bonds between 2016 and 2017.
On the basis of this hypothesis, Bankitalia maintains that it can be estimated “that the average cost of bank funding will decrease by around 20 basis points to 0,3%' for banks”. The resulting savings "could be reflected in a decrease of about 20 basis points in the interest rates applied by banks to new loans to the private sector".
Speaking of employment, Via Nazionale underlines the improvements made in the 1st quarter "despite the slowdown compared to 2015 when the tax relief on new hires were fully applied".
The increase in employment in the first three months of the current year concerned in particular the employee component and the stabilization of the self-employed, which had marked a marked decline in 2015. Employment continued to grow in industry narrow and in services while it fell in construction. "The increase in employment recorded in the first quarter derives in part from the high number of permanent hires made by companies in December 2015, to take advantage of the greater tax relief provided until the end of last year".
