BARCELONA (SPAIN) (ITALPRESS) – “To build a single capital market in Europe, two fundamental problems must be addressed. The first is the lack of a risk-free European public bond.” This was said by Bank of Italy Governor Fabio Panetta, speaking in Barcelona at the 20th Spain-Italy Dialogue Forum (AREL-CEOE-SBEES). “A common security is essential for the functioning of developed capital markets,” Panetta continued. “The possibility of trading a risk-free benchmark would facilitate the pricing of financial products such as corporate bonds and derivatives, stimulating their development. It would also provide a form of financial collateral that could be used in every country and in all market segments, facilitating collateralized interbank trading and improving the ability of intermediaries to diversify risk. A risk-free security would also attract foreign investment, strengthening the international role of the euro. “The second problem is the incompleteness of the Banking Union, which forces European banks to operate mainly in domestic markets. The establishment of the Single Supervisory Mechanism and the Single Resolution Mechanism was an important step forward, but it was not enough to create a fully integrated European banking market. A sequential, small-step approach was followed, which has not worked,” the governor stressed. Banks play a crucial role in the main capital markets: from asset management to underwriting and placement of bonds and equities, from listing operations to financial advice and market-making.Their full operation throughout the euro area is indispensable for an integrated capital market. The introduction of a European risk-free security and the completion of banking union are the most important but not the only preconditions for creating a single capital market. The importance of defining a Single European Finance Text, strengthening centralized supervision, and homogenizing mechanisms for corporate crisis management should not be forgotten.”
– Photo Agency Photogram –
(ITALPRESS).
