Banche e Finanza

Banche e Finanza

Most economists believe that the economic crisis is due to a structural excess of saving on investment. However, if we admit that production decisions follow the effective demand, it is easy to show that S and I are always equal. We suggest instead that crisis is due to the lack of demand that causes a high degree of unused capacity. The resulting sunk costs could be transferred to wages, further reducing demand. So, increasing investment, without raising wages, would worsen the effect of the crisis.

This article’s objective is twofold: a) to argue that mergers and acquisitions among banks do not always advantage the financial system’s stability or the merging banks’ profitability (against the current storytelling that M&As are panacean); b) to highlight some widespread worst practices in valuing aggregation synergies as well as the share exchange of merging banks, showing the ample range of discretionary/manoeuvrable values in capital valuation.

An empirical analysis by Brancaccio, Fontana, Lopreite and Realfonzo shows that the ECB is not capable of controlling the nominal income trend and therefore also inflation. The following study is in line with the alternative argument, according to which the real task of the central bank is to regulate the rhythm of insolvencies in the economic system.

The “dark illness” of the Euro-zone is that the abundant savings are not mobilized for investment. The question therefore arises of whether the European Central Bank is actually doing everything possible to prevent Europe from falling over the cliff. The article reports the remedies put in place by the ECB first by reducing the interest rate and then via quantitive easing. None of this has been able to cope with the insufficiency of investments which instead would be enough to create opportunities for growth via greater public spending.

Numerous experts argue that the single currency is the cause of problems in many of the eurozone countries. However, this article illustrates the fact that the roots of the Great Recession lie in a long global distribution conflict that compressed wage incomes and expanded capital incomes. Equally there is the Greek and Italian economic illness that long pre-existed joining the Euro. It is therefore not enough to leave the Euro because this would bring down the institutional framework of any battle for a different policy.

This paper summarizes some criticisms against the recent Italian reform that imposed that the largest cooperative banks must to be transformed in limited companies. The main are: better governance and business model of the mutual ownership, cooperative banks’ positive impact on system stability and their importance/resilience worldwide. It deepens the discussion, by analysing financial data of Italian banks from Mediobanca-R&S dataset and showing that limited company model is not better than cooperative one in terms of performance and risk; therefore, the 2015 reform doesn’t seem to be justified by the past empirical evidence.