According to one of the leading experts in the sector, some banks are seriously at risk of not being able to move forward. Let’s see his analysis in detail
The crisis covid it has also damaged some banks which apparently will struggle to readjust themselves in view of future changes. It was to sound the alarm Governor of the Bank of Italy Ignazio Visco, that on the occasion of the presentation of the “Annual report for 2020 ″ he was quite categorical in this regard.
In his “Final considerations” he explained what is wrong with the current one banking system and which types are most at risk. At the same time he also explained the solutions to remedy the situation, which in the long run could become deleterious.
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Banks: Ignazio Visco’s prophecy on small and medium-sized institutions
Second Visco different intermediaries mostly of medium-small size and with traditional operation they have a rather weak structure. This it is the result of inadequate corporate governance and poor internal controls. In other cases this is due to the reduced ability to access capital markets, to innovate and exploit economies of scale and diversification.
However, the governor of the Bank of Italy has mapped out a path to follow to avoid meltdown. With the stipulation of commercial agreements with other operators, the creation of consortia and aggregation operations you can give new life to credit institutions which alone would make it difficult to meet the new needs of this particular historical phase.
Completely different situation and decidedly more serene for the large Italian banks, supervised directly by ECB, which eliminated the distance from the average of capitalization and quality of the loans that theItaly he had respect to other countries.
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However, the stumbling block remains profitability. Last year in fact the return on capital and reserves fell by three percentage points (to 1.9%). A factor due to the low interest rates at high costs and competition fueled by the application of digital technologies to the offer of financial services, which squeeze profitability.