European Central Bank governing council member Ignazio Visco said on Wednesday Italy would benefit more from reforms to its public administration than from the creation of a large public lender to support its economy.
Speaking at a meeting of the Italian Banking Association, Visco, the governor of the Bank of Italy, noted that public sector management in the banking sector had often been marked by “serious inefficiencies in the allocation of resources.”
“It should not be forgotten that rather than support from a big public bank, the Italian economy would benefit more from an efficient public administration, adequate infrastructure, investment in innovation and knowledge,” he said.
He also said that Italian banks have shown an increased capacity to respond to economic shocks during the current crisis, but added that special interventions may still be needed.
Visco, who is also governor of the Bank of Italy, told a board meeting of the Italian Banking Association (ABI) that the position of smaller banks required particular attention.
He said public support had been needed for some smaller banks and that “it cannot be ruled out that it may be again in the near future.”