The huge liquidity flowing into the markets after the ECB quantitative easing has led to a rapid rise in equity prices and “the growth in the price/earnings ratio could be a risk signal about the possibility of speculative bubbles forming”. This is the alarm raised by the president of Consob, Joseph Vegas, during his speech at the annual meeting with the financial market.
In any case, Qe "has led to an unprecedented drop in interest rates and yields on government bonds - added Vegas - which will reduce debt service spending and make it easier to implement containment measures of the deficit by the countries with greater public finance imbalances but in parallel”.
The number one of Consob then underlined the historic opportunity to overcome the historical constraints of the Italian and European financial equilibrium. The report of the Commission, this year away at the Expo structures, thus launches a series of proposals.
Why not use, says among other things Vegas, the infrastructures of Expo to host "a European hub of professional services dedicated to SMEs and innovative startups?". A single large database could be created in the area for all European SMEs, capable of "making visible the broad spectrum of investment opportunities in the real European economy".
Even so, the Achilles heel that threatens the recovery can be overcome: the almost total dependence of the productive fabric, especially small and medium-sized ones, on the bank financing channel. The lack of equilibrium between the banking channel and the financial market threatens the efficiency of the real economy.
Hence the intervention on several levels that Consob intends to promote to stimulate the access of SMEs to the financial markets. “For example – says Vegas – in the matter of public subscription or sale offers one could foresee prospectus schemes with extremely simplified content for all offers of already listed securities”. We could, Vegas adds, “reflect on the possibility of allowing SMEs to carry out a statutory opt-out with respect to the discipline of the mandatory takeover bid".
It is not excluded, on the occasion of the transposition of the directive Transparency, which looks upwards the threshold of mandatory communications, today fixed at 2 percent, up to 3 or even 5 percent. L'obligation of quarterly reportingFinally, it could be limited only to larger companies.
No less relevant, in the perspective of favoring the access of SMEs to the markets, could be the birth of funds of funds. The objective, according to Consob, is to increase the level of liquidity on the market, especially for SMEs, "capable of guaranteeing the stability of quotations and their greater consistency with the fundamental values of the company".
The operation can succeed provided that, as Matteo Renzi himself has already anticipated, the role of active protagonist of the financial market of pension funds grows. “In Italy – added the president – the role played by pension funds in the equity markets is still too limited. According to the most recent data from the OECD, the investment of Italian pension funds in shares is equal to about 20 percent of total investments compared to an average of about 40 percent for OECD countries and 50 percent in the United States” .
In short, in a propitious moment for the financial markets, starting from Pizza Affari, Consob stimulates operators, operators and politicians to make a leap in quality. The goal is the realization in the next decade of Capital Markets Union, or rather, as the EU green paper foresees, we must acknowledge that the mechanisms we were used to to support growth are no longer needed. We need to work to harmonize a system of both legislative and fiscal rules. A utopia? No, a multi-year project that is necessary if the development of the eurozone is to be guaranteed. To achieve this goal, concludes Vegas, "we must also give ourselves the same taxation and the same laws".
