il testo originale in italiano con titolo “L’ipertrofia della finanza e la difesa del risparmiatore” è stato pubblicato su questo sito in data 25 ottobre 2016.
La traduzione in inglese è stata realizzata da VERONICA BONAZZA



Conferenza tenuta il 24 ottobre 2016 al “Centro iniziative di cultura politica Alcide De Gasperi” di Castegnato sul tema:



 L’ipertrofia della finanza e la difesa del risparmiatore



Summary of the conference held on 24 October 2016 on the topic:

The hypertrophy of finance and defense



Is it best to consume or save?

a) From an individual point of view

The answer depends on the definition of saving, which can be summarized in: we abstain from consuming today to consume in the future. From here the answer: everyone chooses his future. The first focal point is when the future becomes the present. That is, the focal point is the time.

b) From a collective point of view

The individual savings by the sum of many individual savings flows to financial institutions that redistribute to companies that make investments. But in what? This is the second focal point that matches the first, because the investor has to face the problem of when to give back.

As you can see the time is always the common denominator of the two points of view.

But now there are two considerations:

–       the abstention from the consumption is only a temporary postponement and every day, in the great mass of many individual saving flowed to the institutions, there is a mass of small savers who wish to withdraw their differed consumption in the past as saving to translate into present consumption. This recoup, that is with a minus sign, is replaced by a present savings we interpret as a plus sign. The balance of pluses and minuses is the dynamism of the economy. If the balance is negative (ie, decrease), the possibility of the resource is less, if it is positive (ie, growing) investment opportunities are growing and this suggests immediately that increasing the investment will increase the future income streams. But this is a partial and misleading representation, because the consumer can indirectly fuel the investments. Without the consumer the production languishes and curbs new investments. But as the economic history teaches, it is not enough: it is necessary, if we want to achieve growth (note the difference between growth and development!) that, between savings and investment are inserted according to the Nobel Robert Solow model, the technical progress, the organization, the effectiveness of the infrastructure, the laws well made; let’s to think, for example, to the two toothed wheels of the bicycle: if the central one is not of greater diameter than the rear connected by the chain, it does not increase the speed, and with attention to the exchange rate;

–       the question if it is better to consume or save, is misleading and can turn into a trap, because saving and consumption are complementary to allow an economic balance and the time component of the parallelism between the two is essential. I have often wondered if we can call up the Lavoisier Law on conservation of mass: “nothing is created, nothing is lost, everything is transformed.”

From here, two more fundamental questions: a) Why we save? b) How does the drive belt works, that is, the bicycle chain?

a)      Why we save? Essentially because we fear a lack of resources in the future, so there is a withdrawal to the present and immediately comes the answer to the political incentives to increase consumption: it is a useless policy, because fear of the future is a phenomenon that is not so much psychological and individual, but depends on the forecast of the general economy. If there is no real possibility of future security economic conditions, it is useless to hope that we can convince you to consume today. So, the ascertainment: the savings has not to consume with money, because, instead, it is a virtue, even when it is driven by necessity or fear, and the virtues should be rewarded.
Let’s do an interim observation. Who does say that saving is a virtue?
Me, for sure and with conviction. But I’m in good company, with none other than Jesus (see “The parable of the talents” in Matthew 25,14-30). But Jesus went further and talked about savings with interest-bearing investment (5 talents who become 10) and penalized the non-interest bearing (1 remains 1), because it remains sterile.

The award leads to two questions:

i. With what do we press the virtues of thrift? Answer: with the interest;

ii. How much should be the interest?

a) So saving is a virtue, and in my opinion is sacred, and must be protected. But this talk of protecting we will resume.

b) For now we answer the question already placed: how much should be the interest? The interest is expressed as a rate, for example: 4%, but that 4 is the sum of two components, suppose a 1% basic fee + 3% for the risk component, ie of capital loss. If in Germany the Bund make the 1%, meaning that in Germany the risk component is zero, while in Italy is 3. An Italian investor takes an interest of 4 each year and for each savings 100. But, if is there a Mr. X, whether a banker or a wolf in sheep’s clothing that offers me 25%,  it means that the % of risk of losing capital is very high.

Who may fall or is a fool or someone who loves the risk, nothing else than a naive poor, because a minimum of wisdom and prudence should open eyes, without the need to consult an expert in finance.

b) how does the belt drive works, that is, the bicycle chain?

Up to fifty years ago, we can say that the belt has generally worked well, with the banks to act as a bicycle chain. The finance was part of  the real economy, the one that produces goods and services. Then finance gradually went on his way, as servant became mistress, aided by the Anglo-American world, which favors today than tomorrow, all at once, the bet up to chance,  the bag compared to the bank, the richness of the paper than the actual, reckless risk than reasonableness. Hence the hypertrophy of finance of the title of our meeting. The dark soul of this hypertrophy is, for common diagnosis, the exasperation of so-called “financial derivatives”, that is, betting on what will be the price of the commodities in a few months that is, oil, copper, gold, wheat etc., but not that there are real underlying contracts of the assets exchange. This means that the parts of the contracts are no longer entrepreneurs in the real economy, but anyone, that is, “all” and especially the banks, which have added to the risk of default of their loans consisting in Companies loans, the risk of loss of the bet on derivatives, all in addition to the madness of high banking directions that they can cash in rewards at the end of the mandate for their disastrous managements. The destruction of the future and the hopes of many investors is even rewarded. Or not? And where the holy virtue of savings ends? However, to be fair, it should be noted that banks are not the only ones responsible for the disaster caused by the financialization of the economy. There’s more, and worse!

Inizio modulo

This is the first part of the title of this meeting.

The second part is: how to protect the investor? There are two moments of the protection:
a) laws, which call upon all to talk, but no one wants them in practice, and the actual functionality of the Supervisory Board that should be either preventive or it is useless. In Italy supervision is entrusted to the Bank of Italy, which regularly receives, by the “Matrix of the accounts”, such a data stream, which cannot claim not to know that going in then failed banks. Nor it can be said that there were no powers of intervention, other than to send inspectors to the banks, even in order to question irregularities;

b) interventions in the final balance: “Interbank Fund for Deposit Protection” and the new EU called bail-in, that is, in Italian “security or internal security”. Let’s see what the two institutions expect, and above all we try to answer the question: how and when the investors are protected?

  • § “Interbank Fund for Deposit Protection”, is a consortium of private law whose members are all Italian banks, with the exception of Cooperative Credit Agencies, which aims to guarantee the Italian depositors in the current account up to 100 thousand euros, but it does not work beyond this limit and does not apply to shares and bonds issued by the bank and other so-called financial products. As you can see, it is a very limited protection;

§ the bail-in – literally ‘internal security’ – concerns the European Union countries. It is based on the concept that, for the rescue of a bank, the shareholders of the institute itself should pay as first, without outside aid, or to another company, in particular, of the Country. The objective of the European Directive Board is to prevent the State to save the banks and that the saving is not on the public budget, as happened after the 2008 crisis the rescue of some German and British banks remained alived thanks to heavy injections of public money. Now the troubled banks, rather than by the individual home nations, will be rescued from its (in order): shareholders, bondholders and depositors, as if to say that the depositor does not receive any protection, because the bail-in wanted to avoid any negative impact on public deficits, as they would in the case of the state (bail- out intervention). The criticism of these innovations have been here since the very fierce and by experts and economists at the ABI (Italian Banking Association), who argued that the bail-in is unconstitutional for the art. 47 of the Constitution. Above all, it is feared that no guarantees could be reduced inflow of deposits by investors and that, taking into account the restrictive rules of Basel 2, the banking credit to the economy from production banks, ie businesses, may fall further, pushing the economic recovery. If that happens, and it expected to happen, the relapses on employment will be a consequence, because the drive belt reduces its output, as if the largest gear wheel of the bicycle shrinks its diameter. It is a matter of gear ratios and cyclists know it!

And then in conclusion:

what to do? Put money in the mattress? No: instead select healthy financial institutions, and safe and prudent without waiting miraculous interests. To shy away from the witches of the credit. The saver will defend himself with prudence! Finance is not a supermarket, not sparing neither the 2×3 and for the miracles we should go to Lourdes … if Our Lady would deal with finances! But fortunately for us Mary of Nazareth is concerned on the other.

Translation by Veronica Bonazza