More financial stability but debt remains risk says BoI

More BTPs for foreign funds and households says central bank

By: ansa.it

Apr 30 2024
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More financial stability but d

Italy's financial stability is improving thanks to more stable markets, falling inflation, a GDP that is expected to accelerate in 2024, healthy banks and companies with still growing profitability, the Bank of Italy said in its regular report Tuesday, which also highlighted the consequent reduction in the Btp/Bund spread.
    On the other hand, the BoI, in addition to geopolitical risks, pointed out that the public debt/GDP ratio "at high values nevertheless remains a risk factor" and recalled that higher growth rates and "an improvement in the structural deficit" will be required to comply with the EU stability pact.
    Purchases of BTPs and government bonds by households and foreign investors, chasing higher yields, are increasing, while the share of banks and insurance companies and, as a result of monetary policies, is falling, the central bank added.
    As shown in Via Nazionale's financial stability report, the share of government bonds held by Italian households has risen to over 10% of the total.
    This is an effect of Btp Valore issues and a shift from current account deposits of liquidity towards more remunerative investments - a growth that went in parallel with that of foreign funds, said the BoI.