The country's economic situation and budgetary policies, the prospects for monetary policy and the relationship with Europe, a call and a stimulus to the banks to do better. There was all this in thespeech by Ignazio Visco in front of the audience of Assiom Forex financial operators gathered in Verona in what was his first speech of the new mandate, his first speech of 2018, his first speech after the fuss of the Banking Commission, less than a month from the elections. The Governor did not talk about politics, but reading his words one cannot escape the clear message that he sent to politics. With the concern that a long vacancy of powers after March 4 could seriously damage the country while decisive choices will be made in Europe. Visco is clamoring for a season of structural reforms, a prudent budgetary policy.
Indispensable reforms, essential to raise our potential for economic growth. And in this sense we must count on European aid for flexible budgetary policies, but this cannot happen with high deficits, given our deficit situation. We must therefore consolidate the current recovery by supporting a growing GDP. The moment helps: rising employment, encouraging productive activity, flying exports and accelerating investments with more vital businesses. And so reforms, reforms, reforms invoke Visco who implicitly asks politics for a short time so as not to lose this chance for recovery. The European context remains favourable. At least until the end of 2019, monetary policy will remain accommodative. Abundant liquidity and low interest rates ensure the ECB for at least two years. The success of the Frankfurt choices has given our economy breathing space and stability, we must take advantage of this lifesaver for another two years. Certainly, the risks of too low inflation remain, above all due to wage moderation. The unknown factor remains exchange rates, but in this case the ECB can do nothing. But Visco also says we shouldn't worry too much about the next season of higher rates on our debt.
It is true that it is very high, but its average residual life of seven years seems capable of absorbing this increase over time. And then, the Governor increases, we shouldn't worry about the imminent return to normality of monetary policy, but about the credibility and effectiveness of the reforms and the reduction of the debt. The country must be a protagonist in Europe and can only do so through economic growth and financial stability. And then the banks. It's true they are better off, but they need to recover profitability and competitive ability. The reduction of non-performing loans and the recovery of loans are not enough. And so Visco said clearly what they must do from now on. Costs must be compressed and consortium mergers or integrations launched to create cost and revenue synergies. Banks must invest in new technologies with particular reference to those for new payment systems, the fintech sector, so to speak. And then, a sore point after what has happened in recent years, it is necessary to increase transparency towards customers, not as an action imposed by law but as a strong competitiveness tool.
