A provision contained in the budget law could prompt the European Central Bank to ask Italian banks to reduce their exposure to government debt securities.
Carlo Messina, chief executive of Intesa Sanpaolo, said this today.
The measure, which allows the state to defer over a 10-year period payments owed to banks in 2027, will force lenders to reclassify the credit as riskier, Messina explained during a parliamentary hearing on the budget.
The measure amounts to a “South American approach” to managing public debt, Messina said.
“I have 10-year maturities coming due next year, and you extend a credit to 10 years without interest. This is called forbearance, meaning it is a technical form of what the ECB defines as… before long, they will begin reducing government bonds,” he said.
(Translated by Greta Colombo, edited by Stefano Bernabei)