Investire | June 2021

The savings of the Italian people are – together with Italy’s unmatchable artistic heritage – among the most valuable resources of our Country.

Yet, our savings share with our artistic heritage a sad record: their insufficient enhancement.

The amount of liquidity in the Italians’ bank accounts is worth 1.614 billion euros: 1.122 billion euros are owned by families (+ 72 BLN in a year), and 492 billion euros are owned by companies (+ 94 BLN vs 2020) (source: Banca d’Italia, February 2021).

The patrimonial wealth of Italian families is worth 10.000 billion euros: about 6.000 of them have been spent on houses and lands; 1.000 billion euros have been invested in financial contributions; 1000 billion euros are destined to retirement funds and severance packages. That leaves 3.000 billion euros, which is more than the public debt.

If they were gotten hold of by the industry of asset management and employed so as to monetize 1% a year, savers would earn about 30 billion euros a year, creating an incredible flywheel for the economy.

There are three elements that hinder this virtuous circle. The lack of trust in the system of the majority of Italians; the insufficient proactivity of the industry; and the sense of fear for the future, which has increased exponentially with the pandemic.

There is another hindering structural element: the fact that Italy is a bank-centric county. However, banks are currently caught in a chokehold: on the one hand, they have been turned into hospitals by the crisis; on the other, they are weighed down by public debt and non-performing loans.

The capital market in Italy is underdeveloped. In the United Kingdom, the capitalization of the stock market is worth 130% of the gross product, which means that companies nourish themselves through the financial market. In Italy, the capitalization of the stock market is worth only 30%, which means that companies are financed by banks.

If the stock market does not grow, the recession will inevitably impact banks. And this would also lead to a further distortion of the employment of money.

Much could change with the Next Generation EU programme.

The aims are promoting the digital transformation of the Country, supporting the innovation of the production system, investing in two Italian key sectors, tourism and culture. The programme ensures the supply of an ultra-broadband service and fast connection all over the Country.

Much will have to change in the attitude of Italian entrepreneurs and companies. Opening their capital to the market (for example through quotation) could represent a great opportunity.

Italians are not inclined to creating systems. Their reticence is rooted in the history of the country: from king of the world with the Roman Empire, Italy became a land of conquest with its decline. Naturally, institutions are seen as an enemy.

Big bankers and the best financial advisors have the chance to act as cultural mediators between entrepreneurs and capital market.  

Accompanying the best companies towards the stock market, perhaps after having financed and supported them in their early stages, could change the face of our country.

The best ones are already doing so, but for now it is just a small élite.

Nicola Ronchetti