Even today the banking supervision remains imprinted on past experience of the mixed economy, difficult for those who have not lived it.
The bank was configured as an activity for the disbursement of credit to short term, of companies subject to the penetrating direction and coordination of the Government, through supervision. Funding in the medium term e participatory they belonged to the government through Iri, ENI, IMI, the Cassa per il Mezzogiorno, Mediocredito and other institutions; he was also in charge of the management of the financial facilitation laws for sectors and territories. Bank intermediation prevailed in the financing of the economy real, making direct share funding on the Stock Exchange was marginal for manufacturing companies; the bond was practically non-existent. Mediobanca itself, conceived by Mattioli as a mechanism for the development of the direct funding market, had in fact concentrated, thanks to Cuccia, in credit intermediation for private companies. The companies and credit institutes were under public law or publicly controlled companies, so that ultimately it was the Government that nominated their exponents: few significant banks were exclusively private.
Elementary and bank-centric, of companies and specialized public institutes, the financial system was the Government's privileged instrument in the disbursement of creditfor economic policy. Consistently, the objective of competition between operators was residual, as it would have hindered the selection of credit by which public intervention obtained what we now refer to as state aid. As a political and high administrative activity, it did not fall under judicial control. Jurists spoke of a sectoral system of credit, an original formula for public service. In turn, subtraction from the market provided for the defense of savings, making them the state's guarantor. Banking intermediation was supervised by the Bank of Italy, owner of the currency, so as to combine monetary and financial policies under the top government direction. I recall that the Bank was then a technical agency of the Government, which had the Governor's revocation in the event of a breach of trust, as there was no expiry date for the Office: independence was entrusted to the quality of the person called to office. It was necessarily an autarkic financial system.
The system proved to be effective in the post-war recovery phases and in the initial development of the industrial economy; it could not have lasted. However, it had become incompatible with the subsequent choice of Italian integration into the European Union, which in the euro area separates finance and money; which regulates finance as market European open to the global; which entrusts the money and the supervision of the financial markets to Authorities independent of politics.
Supervision was also converted with the conversion of the public credit service into a business market, from an agent of governmental power to direct the (mixed) economy to an authority of control prudential: verification of the legality of the behavior of private agents, independent of government authorities, dependent on the market for their size and survival. It is the companies – free to define the object (so-called universal bank) and to decide the operations – which with their choices contribute to directing and coordinating, forming the financial market. We verify the priority of private law, with the consequent expansion of judicial intervention: ultimately the judge, in applying the law to resolve the conflict, is the authority of the market (rule of law).
In organizing prudential supervision European law articulates responsibilities in supervisory authority system, differentiated in functions: to contain administrative control al role of guarantor of legality; to preserve the risk of the deal managed in the market on the entrepreneur; for the efficiency and transparent distribution of responsibilities that is obtained with the correct balance of powers; to preserve competition from even implicit state aid, the disbursement of which must be left to the exclusive political competence as an exception to the general rules of competition, for defined general interests.
It is a system already adopted by other Member States (e.g. France); appropriately, since in the European dimension, potentially global, the market that companies create is not confined to the territory of national supervision. It is not adopted by Italy, which in adapting to the European institutions has preferred to take advantage of the derogation permitted in this regard, to favor its own traditional approach; with drawbacks.
we find prudential supervision entrusted to the Bank of Italy, concentrated in the Governor and in the Directory, which assists him. The governor it is primarily responsible for monetary policy as a component of the European System of Central Banks. Instead macro-prudential supervision in the ECB (interventions concerning the system) belongs to the President, while the responsibility for prudential supervision is entrusted to a separate board (supervisory board) presided over by a person appointed in political offices according to the procedure which configures it as an Authority responsible for its own competence; according to specific provisions that make it a body whose independence is different from the independence of the ECB in monetary competence. In the case of the Bank of Italy, the independence of prudential supervision is identified with the central bank, preventing the separate assessment of the personality in relation to the position in the decision to appoint the manager; Correlatively, the dysfunction of supervision compromises the image of the Governor who holds the monetary competence.
At the same vertex of the Bank of Italy they note: regulation (standardization), supervisory operations and management of banking crises. While in Community law, standardization is entrusted to the EBA (European Banking Authority) and the management of banking crises is entrusted to the Single Resolution Board (Union agency with legal personality). The Interbank deposit protection fund it is indeed a consortium of member banking institutions, but remains subject to strict supervision by the Bank of Italy, with the risk of pollution in the use of resources. Instead, according to the recent proposal, the European Deposit Insurance Scheme is entrusted to the Resolution Committee, with separate management and responsibility. It is also worth emphasizing that in the exercise of supervision by the Bank of Italy the procedure is missing review of the intervention documents which the addressees can promote, according to the Community procedure, to the Administrative Commission of review, provided with particular guarantees of impartiality with respect to the Authority that issued the documents (quasi-judicial body); particularly important when it comes to the imposition of sanctions.
In this context they should be discussed the events of the recent banking crises. They are crises mainly due to malfunctions in the disbursement of credits, suffering if not unrecoverable. They seem to be dysfunctions that are easier to monitor than other crises; therefore from many quarters, even in Parliament, they complained supervisory deficiencies, whose lack of reactivity at the moment in which they were already revealed aggravated their path. The concentration of powers leads one to think that whoever supervises and also has the decision on crisis intervention can be brought to postponement, in the reliance that time will fix things; the situation emerges as a conflict of interest should the crisis reveal supervisory dysfunctions. How to explain the inertia of supervision despite the serious findings of the inspection report (verifications as at 5 July 2001) on the Banca Popolare di Vicenza? The report was widely picked up in the press following the recent crisis. The responsibility of the Governor is called into question, while it would be good for the system to differentiate the positions.
On the story of Popular of Bari we have read the extraordinary administration decree (December 13), the year-end decree-law (December 16), the report by Minister Gualtieri (January 10) and press reports. It is hypothesized the transformation of the cooperative into a limited companyand then rebuild its capital. It would be strange if public intervention (as it appears according to the minister's report) made it possible to rebuild the capital as if it were contributions from third parties interested in the purchase of the shares: the company would become solvent again, while it is precisely the state aid that would confirm its irremediable crisis: the intervention would not be private capital, but State aid. The operation would confuse the responsibilities, but would also avoid the declaration of insolvency (relevant among other things to the criminal effects) already pronounced in the previous crises (e.g. Popolare di Vicenza).
We find the Government involved in the events without it being clear whether it is due to the need to promote state aid, in which case the procedure must be initiated with the EU Commission, or due to the traditional mentality of the mixed economy which wants it to be the guardian of savings, which it would pollute supervisory independence.
Just these experiences confirm the need to rethink the organization of supervision. It should be noted that the malfunctions, even before attributing them to the Bank of Italy, are due to a deficient legislative setting. The Government and Parliament should take charge of the reform, using the technical bodies of the Bank of Italy, but not actually delegating the configuration of the system, as happens.
