FROM EIR DAILY ALERT

Hearings on How To Introduce Glass-Steagall in Italy

March 7, 2019 (EIRNS)—Italy’s Finance Undersecretary Alessio Villarosa (M5S) announced that a “Table” will be established, including hearings, on how Glass-Steagall can be introduced in Italy. In a statement reported by La Presse March 6, Villarosa says:

“Today, at the Ministry of Economy and Finances, together with some M5S members of Parliament I have opened a working table on an issue which I consider to be a decisive one: Separation between commercial banks and speculative investment banks.”

The two functions had been rigorously separated until disastrous reforms in the 1990s. In recent years, Italy has learned that the universal bank model is structurally unstable and that that instability in the banking sector is a virus which spreads and pulls the real economy down.

A return to banking separation has been debated for years at the international level, and in 2012 some “tables” had been opened in Europe as well, after the release of “Report of the European Commission’s High-level Expert Group on Bank Structural Reform,” better known as the “Liikanen Report,” after the then Finnish central bank governor who headed the commission, that year.

“The Table is a first step to deal with a dossier clearly included in the Government Contract. Therefore, we proceed on the basis of a popular and parliamentary mandate. The banking system must go back to exclusively serve the real economy, rigorously avoiding investing depositors’ money in speculative financial operations.

“We intend to start our work through an investigation, asking all players in the sector to participate. It is a priority Table, also given the sensitivity of the action which, however, is necessary above all in light of fragilities shown by our banking system in the past,”

Villarosa concludes.