L'AD Gian Maria Mossa all'incontro "Italia 2021-Competenze per riavviare il futuro" con PwC Italy

Let's explain it. So, yes, certainly, there are three natural components to liquidity in current accounts. The first is a stupid one: the current account is a payment instrument, nothing more, nothing less. Then there is a component of uncertainty, which has been joined by an investment component, in the sense that the classic saver, who was used to a BTP (government bond), now finds it more convenient to leave money in the current account for about 10 percent, more or less. So it is a stratification of different components. The uncertainty component can be managed, the investment component certainly must be optimized, and then there is the natural availability of cash in the current account, which, as is natural, delineates even the most evolved economies from a financial point of view. The challenge is how to take from this 1,500, let's say a third, and optimize it financially, which means creating the conditions for the saver to have a greater return. Of course, with greater return there is a risk component, and that is what we need to discuss: how to work on it, and there are obviously different methods and approaches.

We talk a lot about, and I fully agree with, the theme of bringing savings closer to the real economy. Exactly, and it's not a new topic. When we started talking about the Capital Market Union, a European objective was to bring private savings to the real economy. How is it done? How do you channel savings into the real economy? Look, I can give you an example of what we have done, and a very sensible proposal. The difficulty is to use vehicles that already exist today, called healthy and securitizations at the European level, to involve the private saver in financing everything that does not go through a regulated market. So, how we have done it. Today we truly represent the player that has done the most, we have done over a billion in securitizations. It is about being able to unbundle the risk of instruments that collect, for example, financing or invoice discounting, where the most risky component is given to some institutional investor. In March, during the downturn, for example with Generali, leveraging on one side the guarantees from Mediocredito Centrale and on the other institutional investors and Generali, we put 100 million to finance businesses. The risk for these 100 million, where did we take it? From private savers who were confident because the first 10 percent of risk was borne by Generali, there were state guarantees on the other side, so they felt protected. And the risk was given to professional investors. We have done over a billion, we have discounted, we have freed up stuck money with the public administration, with healthcare, we have really given cash to businesses. This is an activity that banks should do, obviously. This is a way to complement traditional financing channels with the private channel. Here, what is the real problem? Today, some vehicles, such as securitizations, which are really well-suited to being sliced up with risk, are considered the evil from a regulatory point of view. So while a professional investment client can enjoy a double guarantee, the retail saver can buy a T-bill or a high-yield bond but cannot take the product with the double guarantee. It's a crazy structure, a child of how securitizations were born in the 1990s and how they were received by the Bank of Italy. So they carry the label of a risky product, and therefore we need a bit of courage and to renew the regulatory aspect of those instruments that, from a European point of view, are also advocated, but then they clash with national constraints.

So, the shareholding? The Italian is still tied to an old idea, is that true? Well, there is a reason. Today, anyway, real estate still represents 60 percent of the assets of those famous 10,500 billion. But something strong has happened in the last 35 years: in addition to the loss of value in real terms, they have begun to experience the suffering of loss in nominal value and the liquidity of the investment. So, apart from the large centers, almost everyone has clashed with the fact that real estate is not always equivalent to a concept of refuge and return. So we have mapped about 70 billion in real estate assets in the bank. Because today, technology helps a lot, and the biggest need, and the most difficult for us, is how to extract liquidity. Because today, especially, let's say this is a cultural change that is affecting first the larger portfolios, but I believe that gradually it will be revealed to all sides. And it is very difficult to give liquidity to an asset that, by definition, in a country that grows little and has demographic problems, will become a bit not super for everyone. So that is changing.

Well, then, to be very concrete, imagine you are a saver and you have 100,000 euros in your current account, and I have to convince you to buy something else. I advise... but what is it? So today, what is said? I have to convince you to put money into everything that is not listed in Italy, when every day you read in the newspapers that Italy is 100% of GDP and will be between generations, and then I also tell you, but don't worry, if you earn, you don't pay taxes on it. As a commercial proposition, I don't think I have impressed you. If I told you, look, 100,000, how much do they yield? 0. 100,000, you leave them for six years, we buy liquid PIR, and if by chance at the sixth year you have lost money, I participate in the losses or I make you recover all tax-wise. That's the reasoning. Because 2, 0 to 0, at most I lose something, but the state pays more. The state that took this risk with Mediocredito Centrale to help banks, it was an extraordinary initiative that must be recognized and valorized. In the private field, this step has not yet been taken: protect, take, participate in risk, or put significant tax advantages on capital losses, so that there is this relative convenience to put money from the current account into this type of initiative.

Well, the path is very long. Just think that if you look at the United States, the discussion is how to invest money for retirement in private equity, and here we are worried about how to get some of the 1,500 billion out, and it won't be solved in a short time. Indeed, let's say the transition from positive risk-free to negative risk, and that therefore even with risk you risk not earning enough, complicates the issue a bit. However, Italy is a country driven by distribution, by supply, and much less demand-driven. Because the distribution channels, whether banks, postal channels, financial advisors, they are the ones that characterize. There are examples: those who believed in PIRs made extraordinary numbers, those who did not believe in PIRs made zero. We personally did not believe in liquid PIRs, we made zero. In liquid PIRs, we are trying to give a contribution, and the numbers are coming. Securitizations gave us big numbers. So it is distribution, and it is with distribution that the government should sit down to understand, first of all, why distribution should do one initiative over another.

If I had to sell, let's go back to the famous topic of liquid PIRs or high-yield, as a bank there is a reputational risk, because even in the world of liquid unlisted, there is a banana peel around the corner: there is a liquidity constraint. These products normally have a higher cost structure than others, and there were no higher revenues for the distribution channel. So it is already the distribution that does not want to get involved, even before asking the question whether the final client could be interested.

I believe that we, with the positioning we have, not because I am an expert on energy, but with the positioning we have, we have a great opportunity on that topic: green bonds, cure to bond, and so on. But then you are certainly right that in the world of finance, the theme of sustainability has entered forcefully. So much so that now the topic of attaching the ESG label to any type of investment instrument is almost a conditio sine qua non to have collection data. Just look at where the money went in mutual funds in Europe in the last 18 months. So much so that now it is a box, it has a relative value. So the first serious topic is the measurability of impact. For example, we made a partnership with a London-based company that essentially maps all the main ESG funds, not only in terms of content to make the world more socially sustainable, but also in terms of SDGs, which are perhaps even more important than the laws. Because the Sustainable Development Goals, the famous 17 objectives of Agenda 2030, were made precisely to accompany clients in choosing, to go by preferences, to create, in addition to expected economic return prospects, also a contribution in areas where they are more sensitive.

This is the biggest challenge for those who do our job. Because in distribution, giving a sense of things helps a lot. I give you an example: we presented at Davos, we made a digital platform where the client chooses the 17 goals, and then they translate very simply the contribution in terms of sustainability: number of trips between Milan and Rome saved, if you invest in one way rather than another. Very simple. So we need to pass again from technicality to concreteness. Then so we broaden the audience and we can talk about many other solutions. Generali, but I must say the whole system is moving very well in this direction.