Punctual like the passing of the seasons, the issue of banking mergers aimed at establishing a few and increasingly large groups is once again topical. At the basis of what appears to be the joint plan of Brussels and Frankfurt there should be the right concern for the security of the economic system still burned by the 2008 crisis. But precisely because the objective of having safer and more stable credit institutions, especially in phases of recession, it is more than acceptable that we need to address the issue in a very secular way, without letting ourselves be overshadowed by the ideological fury of "big is beautiful" or, worse, by other and different interests.
Leaving aside a purely theoretical discussion - which, however, sooner or later, should be done - it is useful to remember how every intervention carried out in the last twenty years, at least in Italy, on the banking system, has been aimed, precisely, at creating institutions of ever larger dimensions which have turned into so-called systemic banks, on which the stability of the entire system directly depends. But are we really convinced that by making the stability of an entire economic system depend on a few subjects, albeit large ones, we don't get the opposite effect of increasing the risk of general stability?
Still remaining on the field of security, an evident contradiction then emerges in the incentive policies for the "super banks". While, in fact, greater coverage is required as regards problem loans, the problem of quantifying the risks associated with the "derivative" instruments that several large European financial groups have in their balance sheets and which have been among the main causes, if not the main one, of the most recent economic and financial crisis. An element of instability that is guiltily not addressed and which, if projected into a system made up of only a few large banks, can become worrying.
Then there is the issue of the real economy. Once the system of territorial banks has been reduced to a minimum, will it be the real economy that will have to adapt to interacting with the "super banks" by progressively eliminating any link of proximity with the territory and with local entrepreneurship? Is it conceivable that this is sustainable for Small and Medium-sized Enterprises, for example Italians, which, in fact, make up 80% of our country's production system?
These are questions to which we should begin to give motivated and convincing answers before proceeding further with the aggregation policy and before completely canceling the articulation of the system which, until now, had one of its greatest strengths precisely in biodiversity. Also because we are by no means at year zero but, on the contrary, the process is clearly in progress. In Italy, in 1995 there were 977 banks with an average size of 24 branches. After just over twenty years, in 2016, the number of banks dropped to 604 and the average size more than doubled to 49 branches. Furthermore, if we consider total assets, the level of concentration appears even more evident.
In Europe, in fact, today the 2.810 Less Significant banks (LS), i.e. those under 30 billion, account for 19% (similar speech in Italy where the LS in June 2017 are 436 and account for 18%), while the the remaining 81% is concentrated in just 120 banks. Again in Italy, the more drastic route was then chosen, as demonstrated by the Blitzkrieg the reform of cooperative banks, transformed (those with assets exceeding 8 billion euro) from cooperatives into joint-stock companies, and which was followed by the restructuring of cooperative credit.
Of course, we also have to deal with a technological revolution of unprecedented speed which has made – with the development of thehome and internet banking – increasingly easier and faster for customers to interact with their bank anywhere and quickly. But, also from this point of view, are we certain that by investing exclusively in technological innovation, by completely depersonalizing and relocating the relationships between banks and customers, in addition to the obvious employment problems, we are not running into ever greater and uncontrollable risks?
The trend, as a response to the economic and financial crisis of 2008, rightly aims at consolidating the banking system. In Europe, the ECB does this through increasingly stringent rules on capital requirements, on the adequate level of capitalisation, on the provisions to cover the NPLS. It does so above all with the acceleration for the creation of the banking union. As we have seen, the Italian banking system has gradually adapted, undergoing profound changes in its morphology and function of supporting the real economy.
But in the United States, a country that knows something about the crisis and from which it emerged first and which certainly does not play a marginal role in the global economy, how are things going in relation to the albeit obligatory transformations of the banking system? Does anyone who leads European banking policy know that small American banks are in better health than the larger ones with 10% profit margins compared to a system average of 7,5%?
Last but not least, the question: what will happen to the free competition of the banking system when it is reduced to the presence of only two, three major players?
In short, there are many questions that politics should urgently answer. Problems should be tackled with a sense of responsibility and always in the common interest, taking into account the structure of the real economy. We are convinced that several typologies must coexist within the banking system (large groups and small banks, spas, cooperative banks and cooperative credit banks), both because systems structured in this way are more stable - as it has been demonstrated they have better resisted the crisis – and because it is essential not to lose touch with the roots of the productive fabric and with the real economy. Meanwhile, while the technocrats of Brussels and Frankfurt, through a regulation completely independent of any political orientation, implement the ambitious design in forced stages, the political institutions continue to be silent.
Politics, if you're there, strike!
*The author is the general secretary of the National Association of Popular Banks.
