How will Italian banks use it the new liquidity injection by the European Central Bank? According to the director general of ABI, Giovanni Sabatini, who spoke during a hearing in the Chamber, the institutes "They will use it to finance households and businesses".
Sabatini also explained that at the time it is not yet known specifically how much went to the Italian banks compared to the total figure of 530 billion. “The liquidity injection of the first auction (116 billion gross, 57 billion net, ed) – he added – has made it possible not to reduce jobs to the economy”.
Thus Italian banks were able to cope, Sabatini explained, "with the closure of wholesale refinancing channels". “The liquidity of the ECB has basically been substituted, not additional – the general manager of the ABI specified again – and it made it possible to go and repay the loans for bank bonds maturing in the first quarter amounting to 77 billion”.
“This – concluded Sabatini – made it possible not to have a reduction in credit to the economy otherwise those 77 billion would have been reversed on a reduction in credit. Banks are said to raise liquidity and then redeposit it with the ECB. This is not the case for Italian banks: out of 160 billion raised by the ECB in 2011, only 11 billion were deposited with the ECB".
