ROME, March 29 (Reuters) – Italian Prime Minister Giorgia Meloni’s get together has offered a invoice in parliament to separate retail and funding banks in a transfer that, if accredited, would pressure a radical overhaul of the nation’s banking sector.
The proposal by the Brothers of Italy (FdI) get together comes within the wake of the collapse of U.S. tech lender Silicon Valley Financial institution (SVB) and the emergency takeover of Credit score Suisse by banking rival UBS, which raised fears of systemic stress that would result in extra financial institution failures.
The draft regulation, seen by Reuters on Wednesday, would give banks 12 months to reorganise their operations and select between business and monetary funding actions.
Quietly launched to the decrease home of parliament on March 17, the invoice is sponsored by the pinnacle of FdI within the decrease Chamber of Deputies, Tommaso Foti, and fourteen get together colleagues, together with former Financial system Minister Giulio Tremonti.
FdI proposed a near-identical regulation in 2018, when the get together was in opposition and with Meloni because the invoice’s chief sponsor, but it surely didn’t go previous committee stage and by no means reached the ground of the home for approval.
“We consider that the problem is worthy of consideration and subsequently we have now determined to current the invoice once more,” Foti instructed Reuters.
“Meloni’s workplace was not knowledgeable in regards to the legislative proposal as parliamentary initiatives are distinct from authorities ones,” Foti mentioned, including he was assured the invoice might be profitable.
Meloni’s workplace didn’t instantly reply to a request for remark in regards to the authorities’s view of the invoice.
The overhaul would de-facto reintroduce Nineteen Thirties-era laws scrapped within the Nineteen Nineties by deregulation reforms that some left- and right-wing politicians blame for contributing to latest monetary crises.
Permitting retail banks to interact in “speculative buying and selling” is “dramatically unfavorable for the actual financial system and undermines probably the most elementary ideas of safeguard for the social and moral basis of the financial system,” the FdI invoice states.
In america, requires comparable reforms, with the reintroduction of the 1933 Glass-Steagall Act that separated business and funding banking earlier than World Struggle II, have come from left-wingers throughout the Democratic Social gathering, equivalent to Senator Elizabeth Warren.
Reporting by Giuseppe Fonte and Alvise Armellini, enhancing by Frank Jack Daniel
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