When the Pandemic Financial Aid is shelved, the NPLs of Italian banks they will grow again, but this time the increase will be "less marked" than that recorded during the last crises. This is the opinion of Luigi Federico Signorini, general manager of the Bank of Italy, who spoke today at the Credit Day.
“We expect banks to preserve adequate assets compared to the risks – explains Signorini – and it is essential that they continue to adopt a careful and prudent credit adjustment policy".
The General Manager of Bankitalia then underlines that also fears of a possible “credit crunch”, spread at the beginning of the pandemic due to the experience of the previous crisis, they turned out to be unfounded: since Covid arrived, in fact, “loans to companies have increased steadily until March of this year, for a total amount of 70 billion; subsequently, with the resumption of activities, they physiologically decreased, by around 7 billion".
Therefore, according to Signorini, “the Italian banking system, like that of other countries, overall it has withstood the impact of the pandemic well”. Unlike what happened during the 2008 crisis, "in this year and a half the banks have been able to maintain their support for the production system, and have helped to mitigate the very serious effects of the crisis".
Signorini then takes stock of his experience – recently concluded after 13 years – in the Basle Committee, the international body that defines the prudential rules for European banks. In particular, the Director General of Bank of Italy explains that the latest reform, known as Basel III, has corrected two distortions that are particularly harmful to Italian institutions: "the imbalance between the requirements for credit risk and those related to trading and the excessive tolerance of aggressive models".
Signorini therefore hopes that “the Basel rules will be transposed as promptly and faithfully as possible: I hope that the discussions over the next few months will not represent an opportunity to reopen the debate on the prudential treatment of individual risks. The pandemic crisis confirmed what the great financial crisis had already taught us, namely how important it is to have a robust financial system, adequately capitalized and fully aware of the complexity of the risks".
