Bank of Italy and banking risk, Panetta at the crossroads: ignore or scold the government’s interference?

Le Final houghts of the Governor of the Bank of Italy Fabio Panetta of May 30 are announced as the key economic event of the coming week. The Bank of Italy is no longer what it once was and with the birth of the ECB has lost the management of the currency and interest rates but remains an institution of excellence and a point of reference for the entire country. From the words of the Governor everyone expects to understand what the real state of theItalian economy after the cold shower ofIstat but new forecasts are also expected on the international scenario, on the euro-dollar relationship, on the trend of interest rates and on the financial markets faced with the looming of a loose cannon like Trump and his new threats on duties against Europe.

On the banking risk, the judgement is not up to the Government but to the Authorities and the market

But the wait is above all for the observations of the Final Considerations on bank risk and on the extraordinary season of aggregations that the Italian banking system is experiencing. It will be interesting to know the Governor’s general assessments on the opportunities and risks of banking consolidation, both national and European, and on the adequacy or otherwise of the rules of the game. The central point, however, is another and the curiosity is all played on the attitude that Panetta will assume in the face of the evident invasions of the field of Government which, faced with the various projects of Opa, has transformed from an impartial referee into a biased player. Shouldn’t the judgment on the operations of the risk be up to the supervisory and control authorities and the market alone? On the contrary, the attitude of the Government on the takeover bid of Monte dei Paschi su Mediobanca and especially on the Ops of Unicredit on Bpm bank and on the extensive use of the Golden power, even when only transactions between Italian banks are involved and there is not the slightest hint of intervention by foreign entities, alters the correct functioning of the financial markets and induces the Ue to doubt the respect of European law by Italy. Moreover, the furious and uncomposed reactions of the political forces of the majority with respect to the temporary suspension of the takeover bid by Unicredit on Banco Bpm decided by President of Consob Paolo Savona confirm that in the battle on banking risk the Government intends to be an active player with dirigiste orientations that overlap with the logic of the market and freedom of enterprise.

Faced with the Government’s choice of side, what will the Governor say in his Final Considerations? Will he pretend to ignore the Executive’s interference, effectively covering it up, or, with the institutional delicacy that distinguishes him, will he clearly say that this is not the way to go and that the Government has taken an improper path that undermines both the role of the supervisory and control Authorities and that of the market, and that risks pitting Italy against Europe? No one hopes for a clash between institutions, between the Government and the Authorities, but the Governor is probably the first to know that silence is not always golden.