Head of the Italian Banking Association (ABI) Antonio
Rome - XINHUA
Head of the Italian Banking Association (ABI) Antonio Patuelli said on Thursday Italy is going through "weak" recovery which needs to be enhanced by simplification of its heavy bureaucratic system.
More than one out of four companies in Italy has become "deteriorated" during the global economic crisis, Patuelli said here at the ABI annual assembly.
On the whole, deteriorated credits in Italy have exceeded 290 billion euros (394 billion U.S. dollars) compared to 87 billion euros registered at the end of 2008.
Italian banks have suffered "a significant decline in profitability," Patuelli said.
In the last three years, the average profitability of the top 40 Italian banking groups has been negative, showing a worse performance compared to the European Union (EU) average, he added.
However, the ABI head pointed out, "banking firms and businesses in Italy have endured and continue to endure the effects of the crisis on their own without the bad banks, without state aid and with high levels of taxation."
Patuelli called on the government of Prime Minister Matteo Renzi to ease heavy bureaucracy which weighs on the country's economy.
"Penalizing banks" with excessive regulations would reduce their competitiveness on the European market and would have "extremely adverse effects" on the Italian economy, he stressed.
The ABI head noted that 670 new bureaucratic regulations have been introduced over the past five years in the banking sector, which is also required to carry 21 procedures on behalf of the public administration for free.
Recent measures enacted by the government, such as 10-percent cut in business taxes and an easing of labor rules, were "going in the right direction" but should be developed with "more decisiveness" to foster Italy's ongoing "weak recovery," he said.
Figures released by Italy's national statistics institute Istat on Thursday showed the country's industrial production has fallen by 1.2 percent in May over April, the worst result since November 2012.
The head of Italian central bank Ignazio Visco agreed that the ongoing structural reforms in Italy will create a more favorable business climate both for national and foreign investors.
In his address to the ABI assembly, he said loans backed by the European Central Bank (ECB) will make 120 billion euros available to the Italian credit system, meaning that banks will be able to extend more loans to small-and medium-sized enterprises (SMEs).
"Banks must support the real economy by extending credit to those who deserve it," Visco said.
They must do everything possible to get rid of bad loans and cut administrative costs, he added, in an effort to become profitable again with "transparent behavior and legality."