The opening premise of debate at this national roundtable was that Italy’s banking foundations are complex entities, operating as both investors and key players in the financial sector, but also as leading actors in the non-profit sector, an important component of any participatory democracy (like that in Italy) called upon not only to produce economic goods but values as well.
It was noted, however, that twenty-five years after their introduction under the Amato Law (and more than fifteen years after they became regulated under the Ciampi Law of 1998), the banking foundations still face a number of issues yet to be resolved. Chief among these are those relating to: the autonomy and independence (from their originating banking institutions) necessary for the pursuit of socially beneficial ends and the promotion of economic development; the bolstering of their role as active players in the field of social, cultural and education policies; and the search for new organizational and management models after a financial crisis that has impacted negatively on banks and their major shareholders.
The recent Memorandum of Understanding between Italy’s Ministry of Economy and Finance and the Association of Italian Banking Foundations and Savings Banks (ACRI) was hailed as a necessary step in view of the risk that the success achieved by the foundations could fall into jeopardy. It was further observed that several obstacles have undermined the activities of banking foundations, thereby impeding their growth and consolidation, including without question the operational difficulties and less than transparent situations that some have found themselves in.
Yet although the MoU was recognized as a major milestone, it was suggested that the document integrates and boosts the work already done in recent years, thanks to a process of self-reform which culminated in the Foundations Charter of 2012. Indeed, the memorandum between ACRI and the Ministry represents a further step in this direction, reinforcing the original spirit of the Amato and Ciampi Laws, fleshing out their principles and reaffirming the need for balanced asset management (with the introduction, for instance, of a ceiling of one-third of assets investable in a single asset class), so as to enable foundations to best fulfill their social mission.
Nonetheless, it was conceded that in mapping out a future for the foundations, it is not possible to ignore changes taking place in the banking world. The new European regulations, in particular, alter the risk and return profile of banks, fueling the need for increasingly more patient and long-term shareholders. Foundations will thus soon find themselves faced with the dilemma of whether to boost their role as institutional investors or become impact investors distinct from their originating banks and geared to raising funds for their social objectives.
The memorandum between the foundations and the Ministry was in any case viewed as opening the door for the autonomous governance of these agents of social liberalism, thereby also precipitating a possible – and perhaps desirable – differentiation of their roles in the shareholding structure of banks. It was stressed, however, that in taking this road, the role that the foundations play as gatekeepers of pluralism in the not-for-profit sector should always be borne in mind. This role was judged especially important given Italy’s need to foster the growth of intermediary bodies capable of more wholly giving effect to the principle of subsidiarity.