Giorgetti's assault on the banks

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"A banker focused solely on achieving profit and its short-term distribution commits the same mistake as a politician focused solely on securing electoral consensus. " Economy Minister Giancarlo Giorgetti was ecstatic when, speaking at the ABI meeting, which had just been attended by Bank of Italy Governor Fabio Panetta , he launched this unusual metaphor . Ecstatic and determined to get to the bottom of a reasoning that aimed to remind bankers of what, in his and the Meloni government's view, the role of Italian bankers is: to focus more on granting credit and less on distributing dividends.

"The economy," the minister said, "does not grow through savings per se, but when they are collected, lent, and invested." These words were a jab at banks, which have long been chasing wealth management to cushion the decline in profit margins due to falling interest rates. "We cannot simply manage existing wealth; we must create new wealth," Giorgetti insisted. And again: "Since 2011, banks' ability to provide credit has shrunk by a third." Finally, with an implicit reference to the UniCredit-Banco BPM deal—on which the government has imposed a golden power—he said: "I don't look at the nationality of bankers, but at their ability to grow the economy." He thus contradicted Deputy Prime Minister and party leader Matteo Salvini, who had said that UniCredit is a foreign bank . But he nevertheless suggested that being Italian is not an advantage. Giorgetti's thoughts on these issues are well known, but his long (40 minutes) and intense speech to the ABI seemed like an act of strategic direction to the operators in the sector.

Shortly before, ABI President Antonio Patuelli had highlighted how the current turbulence and geopolitical tensions could worsen the economic outlook and trigger a deterioration in credit disbursement, which is why it would be crucial to unblock an instrument like the ESM, which the government has frozen. Although, it must be said, Patuelli posed the ESM issue in a way that the Meloni government likes: he didn't openly criticize the failure to ratify it, but said that "the ESM needs to be transformed into an EU body" (a currently unrealistic idea).

In short, Giorgetti's criticism of the banks was harsher. And although in the end, almost all the bankers present quickly agreed with the minister's statement, it was more than clear that their positions were divided, especially when Giorgetti criticized them for what they consider an almost sacred mission: shareholder remuneration. "Italian banks are the most active in Europe in coupons and buybacks," the Minister of Economy and Finance retorted. As he uttered this sentence, silence fell in the room, also because he then added that such a generous dividend policy was supported by public guarantees on loans, a measure introduced during the Covid crisis and which left the state with a potential exposure of €294 billion . "But we must emerge from that emergency phase just as we emerged from the Superbonus" (another dig at the Italian Banking Association, which had requested an extension).

Overall, Giorgetti, while avoiding the merits of the ongoing operations, much less hinting at a response to the German government's diktat for Unicredit to step back from Commerzbank, did reiterate the government's motivations for actively participating in the system's restructuring: more credit to the economy and the use of savings for growth. He ignored a key aspect, namely that the pursuit of profitability is the driving force of banking and attracts market investors.

Finally, the minister agreed with Governor Panetta on the need to complete the banking union and establish a common deposit insurance system. This is as if to say that we need more Europe. But even here there seems to be a contradiction, as Panetta clearly explained that Europe exports private wealth to the United States because, unlike that country, it "invests less than it saves" (3.2 trillion compared to 3.7 trillion in 2024). The reason for this is "the limited development and less structured nature of the capital market." For the Bank of Italy governor, it is "essential to strengthen the Union's financial architecture by creating the conditions to attract and retain capital," at a time when investors are seeking alternatives to American assets. But doesn't all this also imply larger European banks, even through mergers between institutions from different countries? And how can this be achieved if states protect their domestic borders? In short, as Panetta says, who also reiterated the need for a common, risk-free European public bond to invest in strategic sectors, this is "an institutional and political challenge."

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