The Conference got underway with an acknowledgement that savings have played a key role in maintaining Italy’s stability during the more acute phases of the recent financial crisis, and may play an even more important role now as a driver of the country’s economic recovery and growth.
With a savings propensity of 11% of disposable income, contributing to a (net) worth of Italian households of around four times GDP, Italy has the distinction of ranking amongst the highest-saving nations in the world. However, it was noted that there are signs that this trend may be changing, with a decline in the savings propensity of Italians being recorded compared to a rise in the savings rate reported in other major European countries. This element of susceptibility is part and parcel of the social and economic transition in progress, in which phenomena such as aging of the population, low youth employment rates and the changing needs of the elderly are playing an increasingly significant role in determining how savings are allocated and managed.
Savings thus represent a major strength of the Italian economic system, but there is a risk of failing to take advantage of all the opportunities that this wealth could offer. Indeed, it was observed that if the stock of savings were mobilized and allocated efficiently, it could, on the one hand, help strengthen businesses and the real economy, and, on the other, offset and complement the performance of the pension system. This latter factor becomes increasingly more significant in light of the fact that younger generations now entering the labor market may not benefit from adequate social security coverage at the end of their working lives.
The reasons which currently make it difficult for savings on hand to be channeled towards the real economy and the social security system were perceived as mainly being of a regulatory, fiscal and cultural nature. The participants accordingly felt that measures aimed at resolving this problem should therefore focus on pursuing the following four objectives:
1) facilitating the flow of savings towards the real economy primarily through tax incentives, regulatory simplification and by encouraging the involvement of specialist operators (such as private equity and venture capital funds) that enable savings to be channeled efficiently to industry and infrastructure;
2) stimulating injections of savings into the social security system by creating ad-hoc investment vehicles and schemes (following models adopted, for instance, in the United States, the United Kingdom or France) with a view to paving the way for long-term social security coverage plans that match the profile and needs of savers;
3) overhauling the way investment management companies operate by introducing more consistent regulation and tax treatment, but also by encouraging operators – who still tend to focus on products rather than on customer needs – to rethink their management methods; and
4) improving the financial literacy of Italians through education and awareness-raising initiatives regarding the investment and pension options open to them, in a climate where the onus and responsibility of providing for their future will increasingly fall on the shoulders of individuals rather than on the State.