(Finance) – “In view of the risks emerging for banking activity, The solidity of the capital must be safeguarded“. He stated it Fabio PanettaGovernor of the Bank of Italy, during the annual congress of Assiom Forex, the association of financial market operators, underway in Genoa.
“Since 2020, the increase in capital ratios has been driven by the decline in exposures at risk – the denominator of the ratios – essentially due to the disbursement of loans guaranteed by the State, which are gradually expiring. The amount of equity is at the same time decreased – he argued – The dynamics of capital can be reversed drawing on last year’s exceptional operating incomethus strengthening banks’ ability to absorb any future losses.”
“Beyond the microprudential perspective, to allow banks to support the economy in the event of external shocks to the financial system, macroprudential capital reserves are necessary – he added – These can be set up by intermediaries using excess capital, without raising new capital“.
Panetta stated that “the Bank of Italy has started a reflection on the direction of macroprudential policy in Italy. The results will be announced in the coming weeks.”