An intervention by the Deputy Manager of the Bank of Italy clarifies the links between finance and economics
Credit and and development. Where the former pays attention to the needs of the latter. It is a question of rules and conduct, and hence of culture and awareness of the need for a balance that needs to be built and preserved. It is around these themes that Fabio Panetta (Deputy General Manager of the Bank of Italy) reasoned – and then wrote – in a recent intervention.
“Credit and development: constraints and opportunities for the Italian economy”, is a lucid analysis of the mutual links between two elements that influence each other and whose dynamics should be fully understood. What Panetta has written is an especially useful tool in this regard.
Panett a explains: the underlying problem is the potential conflict between financial aid and development processes, including, in other words, economic development and financial stability. This is a delicate issue, which the author examines first by retracing the main steps of recent history, then by investigating the crucial aspects of the latest credit reforms and, finally, “the measures capable of extending the offering of financial resources for companies” and thus opportunities for investment and growth.
Panetta’s conclusions are clear. “The financial system must be able to provide the resources for investment and innovation, which are the engines of development”, writes the Deputy Manager of the Italian central bank, who then adds: “Even more than in the past, we need a more articulated financial system, where markets and non-bank operators take on a growing role. It is essential that companies reinforce their capital base and demonstrate their full willingness to open up to external scrutiny and increase their operational dimensions “.In this context, technological innovation can play a crucial role, as Panetta writes: “It represents a formidable economic and social development tool. The adoption of new technologies enables financial professionals and businesses to reduce costs and improve the quality of the goods and services they offer; it can foster social and financial inclusion. We may be able to boost the growth of our economy if we were able to seize these opportunities, governing their risks. It is a commitment that concerns everyone. “And it is from this last statement that all the financial and cultural meaning of Panetta’s intervention derives, as he certainly explores a complex topic, but also manages to provide important elements to understand reality.
Credit and development: constraints and opportunities for the Italian economy
Intervention U.C.I.D. – Unione Cristiana Imprenditori Dirigenti (Christian Union of Entrepreneurs and Executives) Emilia Romagna Group
Banca d’Italia, 2019