Have you ever heard a trader tell his suppliers “if you want to give me your products, you must also pay me”? It seems absurd but this paradoxical situation can only occur in the banking world where savers, suppliers of the raw material (money) of the business, must also pay to allow credit institutions to make revenues (and sometimes profits) by lending their savings to third parties. Beware, sharks have the ability to attack their prey by spotting a drop of blood from miles away.
What is happening to our savings? And what will happen after the pandemic?
This theme, addressed in my latest book Let’s save ourselves!, allows us to explore the other side of the coin of the unprecedented crisis we are going through. In thedose horribilis 2020, in fact, the savings of Italians are increased Like never before. It will seem a paradox but it is the truth. According to Abi (Italian Banking Association) data, in November 2020 the liquidity on current accounts alone amounted to 1715 billion euros, recording an increase in 32,5% approximately compared to the same period of the previous year. A mountain of money, equal to the levels of our country’s GDP. Since the new surge in the spread of the virus occurred starting from the beginning of October 2020 (the so-called “second wave”), and only in a few weeks it will return to (almost) normal, it is estimated that the bulk of liquidity can reach the record figure of 2000 billion euro at the end of the restrictive and facilitating measures.
A similar boom has affected the companies that deal with in recent months savings management: Anima + 88%, Azimut + 16%, Banca Mediolanum + 39%, Generali + 21%, Fineco Bank + 31%, just to name a few. This is precisely because household savings in 2020 he has grown in a consistent manner compared to 2019: fewer trips, fewer dinners at the restaurant, trips reduced to a minimum, courses for off-site children almost suspended. This and much more has contributed to a enrichment of current accounts for 126 billion of Euro. There is also the understandable prudence of those who today consider their job precarious.
The propensity to save, one of the medals in the chest of Italians, is an indicator that measure the ratio between what a family sets aside and the income it holds as a whole. The looming risk after the coronavirus is that, with the natural increase in consumption, this enormous mass of liquidity created in the system can be significantly reduced generating an inflationary push. It is therefore necessary to ask ourselves what our behavior will be when the emergency is over. Will we rush to spend everything we have saved by forgetting the suspended deadlines (mortgages, taxes, tax bills, ordinary consumption)?
Secondly, here’s the thing, so much liquidity on current accounts is manna from heaven for banks. It’s like putting a mouse in a cheese warehouse. They will not let it slip the opportunity to channel this money flow into products that are more profitable for them. And history has shown us that when banks are hungry, they need to prepare to defend themselves well.
The first signs have already arrived. Fineco Bank It paved the way. In a scenario of negative interest rates, the maxiliquidity left unproductive in the bank is no longer welcome. To all inactive account holders (i.e. without financing or investment contracts) with over 100.000 euro on the account, Fineco has sent an email announcing the termination of the contract if, within two months, they do not carry out investment transactions on products other than current accounts.
But above all many banks, including large institutions such as Intesa Sanpaolo, Unicredit, Bnl, Bper, Banco Bpm, are applying, with unilateral changes to commissions of stock for unused cash on current accounts. These are the suggestive and ingenious commissions of excess liquidity, on average equal to 0,5% annual, which banks are starting to apply on current account balances exceeding a certain amount (normally 100,000 euros).
The official motivation, equally bizarre and imaginative, provided to the account holders who will be contacted with countryside to this (attention!), it will be a fairy tale that will aim to explain to them that keeping money still is not convenient for anyone and that it will be better to channel those savings on products that will protect them from inflation that gradually erodes the value of money and from missed investment opportunities . The suggestion will then be that of employ the money, for example in mutual funds, pension funds, stocks or perhaps bonds. So much nonsense.
Primarily because inflation has never been so low. Acquired inflation for 2021 is estimated at +1,2% for the general index and +0,6% for the core component.
Secondly, why to go from saver to investor it is necessary to follow a model of behavior similar to that used by our grandmothers which we have extensively talked about in these columns. Put on your flak jacket and get ready for battle. The armies (of the banks) are already deployed.