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President Pitruzzella during his hearing in the Chamber:“ok to the decree on popular banks”


PRESS RELEASE


PRESIDENT PITRUZZELLA DURING HIS HEARING IN THE CHAMBER: “OK TO THE DECREE ON POPULAR BANKS”

Favourable opinion of the Antitrust on the decree on urgent measures for the banking system and investments.  This was expressed by the President of the Italian Competition Authority (ICA), Giovanni Pitruzzella, during the parliamentary hearing that was held today within the joined Commissions of Finance and Production Activities of the Chamber of Deputies. “The ICA’s judgement – Pitruzzella said – is of great appreciation, both with reference to the intervention on the structure and governance of the people’s banks, aimed at making the system more contestable and the markets more competitive; both with regard to the measures provided for portability of current accounts, such as to encourage the mobility of consumers and encourage more competitive market dynamics”.

With regards to the popular banks, Pitruzzella recalled the survey conducted by the Antitrust in 2008, where the Authority showed “critical profiles from a competition point of view” and called for “legislation to correct the distortions in the credit market”.  While recognising that the popular banks have “an important function in ensuring stability and links with the territory”, the ICA President stressed – especially those listed and of a big size – that already seven years before “they were losing the characteristics that differentiated them from corporations, thus being characterised by an operability which was not consistent with the principle of mutuality that should inspire their operation”.

The ICA had expressed similar considerations in its last two interventions on “Proposals for competition reform for the annual law for the market and competition”.  In particular, the Authority had ruled on the vote which generates an asymmetry between capital invested by the shareholders of the company and exercise the right to vote”, noting that “the stringent limits on the use of proxies may lead to less participation of shareholders at meetings”. From here, the belief that “closed structures, historically motivated by the co-operative purpose and linked to the territory, no longer have a reason for being and require interventions aimed at making the system more contestable and the market more competitive”.

Finally, with regard to the portability of current accounts, the Antitrust reveals the “low mobility of customers” that can be attributed “to a lack of transparency of information, to the link between the current account and other bank services, to the timing and the costs of closing the account”. In the past, the ICA had already called for “regulatory interventions aimed at increasing the mobility of demand and, consequently, to increase the competitive dynamics aimed at reducing prices and to increasing consumer welfare”. In this context, “Article 2 of the decree law can only be evaluated in an extremely positive manner, both with reference to the spread of instruments of transparency of information to the benefit of consumers, and with regard to the planned elimination of costs and expenses charged to the customer”.  According to the Antitrust, when enacting the measure, “it might be appropriate to provide for the repeal of Article 120 bis where it allows some form of enforcement costs to the customer when it terminates the relationship with the bank”.

“Our evaluation and our further suggestions – concluded President Pitruzzella – are intended to contribute to a regulatory framework that guarantees the correct functioning of financial markets and stimulates the development of effective competitive dynamics among firms in the industry”.

Rome, 18 February 2015