Savings, the macro picture, cryptocurrencies and global regulatory balances in general are the main points of discussion of Paolo Savona, Chairman of the Consob, on the occasion of the annual meeting with the financial market. The "recent initiatives taken by the Government" to improve the competitiveness of the financial markets "go in the right direction", said Paolo Savona, president of Consob in particular at the annual meeting with the financial market at the headquarters of Borsa Italiana.
“I appreciated the reference to Capital bill, which reflects the common commitment of Consob, the Stock Exchange and market stakeholders on the field of competitiveness of the Italian financial markets” commented Fabricius Head, CEO the Italian Stock Exchange.
Taxation and savings need to be realigned
“It is urgent to reconsider how to realign charges e regulations, also tax, among the different forms of investment of the saving, remedying distortions stratified over time and contrasting the distributive inequity that they determine", Savona said at the annual meeting with the financial market of Consob, adding that "the different legal treatments reserved for money with respect to financial forms do not appear entirely consistent which assumes savings and therefore a joint consideration of the two markets becomes urgent, overcoming the current privileged treatment of protected bank deposits as part of monetary creation”.
The Dl Fintech and the Ddl Capitali are in the right direction
The initiatives taken by the Government with the Fintech law decree and Capital bill “they go into the right directionaccording to Savona. The direction is that which leads towards a “reexamination of the institutional architecture within which money and finance must move, to achieve the common goal of using savings aimed at real growth. This is necessary to face the future of the country in the context of an aging population”.
Savona dwells in particular on Capital bill to which "Consob has contributed". The president of the Authority in via Martini underlines, in particular, "the incentives for companies to resort to the opportunities offered by the market, such as raising the multiple vote, new ways of board formation and corporate control bodies, the fixation of response times of the authorities to initiatives to collect savings on the market, the obligation to issue opinions on requests made to the supervisory authorities, the limitation of gold plating practices and the granting of greater tax deductions”. Furthermore there is the motivation of the “reduction of the distortions caused by regulatory competition with foreign countries, including taxation, and the removal of the constraints caused by factors which, for simplicity, we will define as pre-rational in nature; this second purpose should be explicitly included in the citizens' financial education initiative”.
The spread does not reflect the Italian capabilities
The spread on Italian government bonds "underestimates" the country's capabilities, the competitiveness of businesses and the high level of savings. The reason for the high spread lies in the high level of public debt and for an assessment "by reason free from prejudices" observes Savona, "instead of pursuing a reduction of the public debt, which would certainly have deflationary effects, it is important and urgent quick return to a primary surplus of the state budget, accompanied by a trend in new debt proportionate to the trend in GDP growth and the private savings that must accommodate it”.
The advantages of an official cryptocurrency
“New forms of official money – denominated digital, o CBDC (Central bank digital currency) – if appropriate regulated, would make it possible to exclude the legal monetary use of cryptocurrencies”. For Savona "the consequence of the introduction and diffusion of official currencies with a truly decentralized register, such as the bitcoin blockchain, would be to demonetize bank deposits and direct the operations of banks towards savings management, without however depriving them of the possibility of continuing their services in the payment system under competition".
For the president of Consob, in particular, "both monetary policy choices would benefit from this reform, because they would establish a more direct transmission of their effects on the real economy, both the management of the banks which, having freed themselves from the worry of a possible flight of deposits, could better govern the balance between the deadlines of their passive and active (the matching), the alteration of which is the main cause of many banking crises and a source of systemic risks”. Furthermore, "the constraint weighing on monetary choices aimed at preventing states of illiquidity and bank insolvency would be eased, the operating burden of deposit guarantee and crisis resolution schemes would be reduced and discrimination between holders would be avoided of covered deposits and any other unsecured liability thereof in application of the "bail-in" rules".
The role of Board advisors with technological skills is appropriate on the Boards
Companies, especially listed ones, and the authorities must equip themselves with all the tools and skills to deal with the new technologies that "incumbent" on the "contemporary" man. “To accelerate their use, it would be advisable to experiment with the figure of Board Advisors, which spread to Anglo-Saxon countries. They would participate in boards of directors without the right to vote to suggest which one to choose among the numerous offers of application of innovative techniques. This figure would open new spaces to the system financial advice already existing; it will be the market, as is already the case for many professions, to indicate who has the necessary qualifications", Savona said, adding that everyone "certainly must equip themselves" with knowledge, but in particular "the authorities delegated to the well-being of the country , making use of expert advisors of the "alignment" between the objectives and values of human beings and the results of the progress of which the technology created by them is autonomously capable”. For the president of Consob, “we must certainly not hide behind the hypocrisy of neutral science, nor ignore its negative impacts on humanity, without, however, letting ourselves be drawn into an impossible attempt to block technological progress. There will always be someone or some country that pursues such progress and those who don't will fall behind."
Testa: the capital bill aims to remove the distortions caused by regulatory competition abroad
Of the report by the president of Consob “I particularly appreciated the reference to Capital bill reflecting the common commitment of Consob, Bag and stakeholder of the market for the competitiveness of the Italian financial markets” he said Fabricius Head, CEO of Borsa Italiana. specifying that the Ddl Capitali “is an important provision, as recalled by the president, aimed at removing the distortions caused by regulatory competition abroad. The parliamentary process is underway, a commitment is needed for rapid approval, especially for the aspects concerning the multiple vote and the removal of gold plating. Fundamental aspects that must follow the reforms already implemented by Consob and Borsa Italiana for the simplification of the process of admission to listing".
Furthermore, continued Testa, “alongside these aspects, the sensitivity of national industry also needs to grow, above all in the use of the tools that with great effort, and in union with the institutions, we are making available to them in terms of market and post-trading”.
Savona's optimistic conclusion
The Consob president closed his speech with an optimistic message: “It has never happened that Italy has not been able to face the difficulties, many of which are much more serious than those we currently experience. There is no reason why it cannot do so even in the current difficult international circumstances where, among other things, the winds of war have begun to blow with more force, under the pressure of national selfishness that has never ceased. The country has given its best in every age and in every circumstance. Why should the opposite happen today, knowing full well that we have cultural and material resources just waiting to be mobilized?”.
