New Bank Separation Bill in Italian Parliament

Parliament deputies from Berlusconi’s Forza Italia as well as from the right-wing FDI (Fratelli d’Italia) presented their draft bill for banking separation, at a press conference two days ago. The bill has been filed on March 27 in the Chamber of Deputies and has the number C.2240. The signers are: Maurizio Bianconi, Pietro Laffranco, Antonio Marotta, Fabrizio Di Stefano (FI) and Massimo Corsaro (FDI).

It is the first time that FI, which has the second largest group in the Parliament, has taken a formal action in favor of banking separation. FDI, by contrast, has prominently campaigned for bank separation.

Mr. Bianconi comes from Arezzo, the same town as Tuscany Councilman Gabriele Chiurli, who has prominently campaigned for Glass-Steagall, but is on the opposite political side.

In the press conference, as reported by Il Velino/AGV News, Bianconi stressed that their bill is the only one, among the other bank separation bills introduced in the Parliament, that “prescribes a direct procedure,” as it does not mandate the government to draft the final bill but it suggests the exact modification to the current banking law. “It establishes that money saved by Italians are invested in real economic activities and help to consumption, according to a liberal logic and according to the concept…. That profit must be ethical. This is in direct contrast to the Banking Association leaders who want to eliminate Credit Unions and Cooperative Banks. Instead, we chose that banking system and not for large trusts which are useful only to finance capital.”

Corsaro said: [Corsaro said”Separation between commercial and investment banks is the only measure that can protect depositors and account holders, be they families or firms, against the speculative use of money by banks to the only purpose of making their shareholders rich, with the threat of distracting private deposits. It is not an accident that a similar Act, the famous Glass-Steagall, was introduced in the American legislation in 1929 (sic) as the first measure to defend the economy from the Great Crisis. Its repeal at the end of the ’80s (sic) was the first step towards the wild financialization of the economy and the production of the giant speculative bubble.”

In the introduction, the draft bill criticizes the European so-called banking separation bills, such as the Liikkanen proposal, because “From a regulation standpoint, to simply separate bank activities is not sufficient, as it does not solve the critical aspect of a single subject performing, albeit with limitations, both activities. We need therefore to intervene decisively, distinguishing between the two kind of banks and clearly separating the subjects operating in one category from those operating in the other category.”
Specifics of the Bill

However, when it comes to define the two categories, the bill makes the blunder of defining only proprietary trading as non-commercial activity.The bill consists of two Articles. Article 1 calls for “changing Article 10 of the Single Banking Act of Sept 1, 1993” in the following way: at the end of said Art. 10, the following is added:

“Banks that perform proprietary trading of financial instruments, excluded products related to the sovereign debt of the Italian Republic, cannot perform the other activities described in the present Article.”

Art. 2 says that banks must decide within one year “which kind of activity they want to perform and proceed, if necessary, to reorganize their company structure.”

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