The National Conference got underway with the observation that one of the negative effects of the international financial crisis has been to halt debate on the problems afflicting the savings market in Italy, and on what measures are needed to overcome them. These problems were already beginning to emerge as early as the late 1990s, but they have become more evident as a result of the crisis. Whilst the structural trend seems to be one of reduced if not negative growth, the comparatively large size of Italy’s savings market – with the country still boasting the top ranking in Europe in terms of savings-to-GDP ratio – continues to provide a reassuring starting point for the process of implementing measures aimed, on the one hand, at reestablishing a virtuous cycle of overall savings growth, and on the other, at supporting real development of the country’s production and infrastructure base.
The crisis has certainly had a profound and sudden impact on the financial choices of Italians. Whilst their propensity to save has increased, there has also been a corresponding rise in the tendency of households to choose investments that are perceived as “secure”, and which are for the most part short-term.
If this change in Italian behavior were to become ingrained, the consequences would be significant for the financial sector and the economy as a whole. Indeed, the channeling of savings exclusively towards non-risky and mostly short-term instruments could have strong repercussions, particularly because this would fail to match the needs of Italian industry – characterized in the main by SMEs with a pronounced tendency towards highly-geared financial structures. It was noted that it is precisely these kinds of firms that need equity in the form of long-term venture capital, not just to withstand the enduring shockwaves of the crisis, but also in order to innovate and pursue the kinds of consolidation and growth strategies that are increasingly becoming essential in a competitive global arena.
Emphasis was thus placed, firstly, on the need to reverse the current trend and, in particular, to restore the confidence of savers, which has been severely dented as much by the crisis as by a series of related scandals. In order to build up or restore the reputation of financial institutions, a joint effort by the various operators in the financial sector will be needed. Secondly, a concerted effort to promote the spread of greater financial literacy among Italian households would also be desirable. To this end, initiatives aimed at raising financial awareness need to be stepped up at all levels, notwithstanding that their benefits will largely be reaped in the medium to long term.
The savings product–development and distribution chains also require an overhaul, especially given the risk of Italy being reduced to a mere outlet market for financial products designed and put together abroad. Leaving aside anticipated national and international regulatory measures in the sector, the watchwords in the design and distribution of financial products are now “simplicity” and “transparency”. It was stressed that this transparency should not, however, be limited to the financial products alone, but should also extend to distribution, the provision of investment advice to savers, and the relationship between the distribution network and the product–development and production chain.
The challenge for the savings industry will thus be to succeed in affordably and transparently offering to each investor the product – or rather, the portfolio of products – that best suits his/her needs. This, it was observed, is no simple task, requiring major endeavors on the part of all players in the industry.
In conclusion, whilst it was acknowledged that the next few years will see the savings market come under pressure, a clear awareness emerged among the Conference participants that the mass of accumulated savings in Italy provides a useful springboard from which to launch efforts to revitalize the country’s production and infrastructure base, and from which to set the country on a renewed trajectory of strong and sustainable growth.