A New Era for Credit in the Mezzogiorno

President Patuelli, what credit is available to the South? Is it true that, especially for micro-enterprises, banks are not very willing to support them?

“The Mezzogiorno is in a phase of recovery, not recession, as we had already anticipated some time ago,” replies Antonio Patuelli, just confirmed for the seventh consecutive time as president of ABI, the Italian Banking Association. “And we are not in a period in which bank loans to businesses and families in the South are decreasing. On the contrary, we are in a rather unprecedented historical phase in which the increase in loans in this area of the country is higher than those in Northern and Central Italy and is actually leading the way in banking investments. This is a completely new context, mainly driven by the NRRP, which has had a relative majority of investments in the Mezzogiorno and has provided a significant boost in terms of road, rail, and port infrastructure.”

There are those who speak of a growing risk of insolvency for companies, for which the banking system would be responsible, as lawyer Massimo Di Lauro claims in an article published in “Il Mattino.” What do you think?

“There is always risk, but this is not the responsibility of the banking world, which instead suffers the consequences. At this time, there has been an increase in loans in Italy for many months—12 for businesses and 18 for families—and across all segments. The Bank of Italy has also highlighted this, documenting that even for the smallest businesses, loans are increasing. This is the real context.”

Are we returning to the old question of whether banks can or cannot grant subsidized credit?

“Let’s try to clarify the topic. The purpose of banks is not to keep money aside and not lend it; in fact, as I said, loans are increasing. But on the concept of subsidized credit, we must be clear and remember that we are no longer in the context of many decades ago, when there were laws that provided for and regulated its existence. Now we are in a single market, with the European banking union, in which there are national and European bodies for competition protection. There are national and European antitrust authorities and the single supervision of the ECB and the Bank of Italy. Therefore, there is a high level of competition among banks, not only through branches but also online, so much so that competition among banks has never been so open. Moreover, it is no longer just a market of national banks: Italy is the EU state with the highest presence of foreign banks on its national territory.”

So, is there perhaps a problem of guarantees from banks in relation to smaller businesses?

“The debate on this aspect is certainly broad. I myself referred to it in my speech at the ABI assembly, also citing the opinion of the Governor of the Bank of Italy on the subject. In summary: guarantees are a form of support for credit, and this is a fundamentally important point in the relationship between banks and businesses. Moreover, the rules on guarantees are not strictly banking law.”

In what sense, President?

“There are also different rules, such as legal constraints introduced in particular circumstances. For example, think of the pandemic: the decree of April 8, 2020, expanded guarantees for businesses, and so we are talking about a law of the state. Subsequently, public measures narrowed that regulatory framework after the end of the health emergency. Today, there is discussion about which guarantees can be intervened upon, and the decision rests with the institutions.”

So, guarantees protect businesses regardless, so to speak, of the banking system itself. Is that correct?

“Absolutely yes. In Italy, there is no lack of regulations to support businesses. Guarantees, certainly, but also the Sabatini Law, let’s not forget, has always been, so to speak, at the side of businesses. And then there is the ZES (Special Economic Zone), which is currently particularly sought after by the entire national production system. I have studied the legislation and I understand well why, in the whole Mezzogiorno, more than in Marche and Umbria, it has produced and continues to produce results of strong, unexpected, and largely unprecedented impact. The very fact that it has become such a lively topic of discussion is a testament to its undeniable success. The ZES remains because it does not need to be refinanced as the old Cassa per il Mezzogiorno did. As an avid reader of the classics of economics, including southern Italian authors, I recall in this regard “Nord Sud” by Francesco Saverio Nitti: if the ZES had existed in the early days of united Italy, Nitti would not have needed to write that book.”