Visco: Italy recession only if gas stops from Russia
For Visco, Italy will end up in recession only in the event of a scenario of blocking gas supplies from Russia. According to the governor of the Bank of Italy, in this adverse scenario, GDP (which should grow in line with the eurozone in the two-year period) would undergo “a contraction in the average of the two-year period 2022-23, to return to growth in 2024”. There would be “direct repercussions of this interruption on sectors with the highest energy intensity, further increases in the prices of raw materials, a more marked slowdown in foreign trade, a worsening of confidence and an increase in uncertainty”.
Visco: maintaining public debt sustainability
The ECB is committed against the “unjustified reactions of the markets” but the “full success of monetary policy will also depend on the shared commitment, in facts, proposals and requests for budgetary interventions, to keep public debts on a path that continue to ensure full sustainability “underlines Visco according to which the ECB” must be accompanied by a clear determination of the tax authorities to maintain public finances in a path of rebalancing “.
“GDP slows, banks are cautious on dividends”
The slowdown in GDP and the “risk of a contraction in economic activity” must induce banks to “take it into account” in “policies for distributing profits and provisions”, stressed Visco in his speech.
“ECB ready for new instruments against market turbulence”
“Reactions on the financial markets not justified by the fundamentals of the various countries”, “can be countered by using decisively, as has already happened in the past, all the instruments in the possession of the central bank and, if necessary, by using new ones”, says Ignazio Visco to the ABI annual meeting according to which “for central bank action to be effective it is crucial that there are no amplifications in the cost of money in individual jurisdictions (countries, ndr)».
Visco: slow on some small banks, risk of crisis
The Bank of Italy keeps a high attention and has asked “to evaluate every action” on some medium-small credit institutions under its direct supervision where there could be situations that could degenerate into crisis. For Visco “in the face of a balanced situation for most intermediaries, elements of fragility remain in some cases, especially in relation to the ability to generate income streams suitable for hedging risks, financing investments in innovation, remunerating capital” .