Milan, June 5th. Up to date, €15 billions of savings have been burnt considering both stocks and bonds from Veneto Banca and Banco Popolare di Vicenza and four other rescued institutions and there are almost 3 billions at risk in the subprime of MPS. The savers hit by the shock are 300,000 and more than 800,000 are potentially involved. However, as highlighted by Action Institute, despite the catastrophic situation, an efficient debate on how to improve the Italian saving system, one of the worst in Europe, is still missing. What is needed is a serious governance revision and attention to financial products so to solve the matter of conflict of interest once and for all. Moreover, it is pivotal to give financial incentives so to promote an efficient allocation of savings. Last but not least, it is crucial to start a program of financial education within school years. These are the four pillars that Action Institute (whose scientific committees host, among the others, Guido Tabellini, former Rector of Bocconi University, Alberto Alesina and Michael Spence, Nobel prize winner) suggests. Italy is once again out to date, even when it concerns to savings management. Two are the main problems: the Italian investor is one of the most illiterate one among developed countries and usually saving management is carried out by banks who obviously act in conflict of interest. The solutions set out by Action Institute through a paper by Sandro Pierri, former CEO of Pioneer, have two focuses: on the one hand, to improve and protect the allocation of Italian families’ savings, achieved through a so-called “richness effect” (an increase of 1% of the financial estate would create 40 billions of aggregate richness, which correspond to €1,500 per family); on the other, to change the environment inside which a saver can make responsible decisions.
It is fundamental –says Carlotta de Franceschi, president of Action institute – that the public debate is not only aimed at understanding the responsibilities of the system, but also to embrace the creation of the right environment to safeguard the saving system.