The government, which wishes to forge a new relationship with the banks, should start with the section on ‘guarantees’

The government’s decision to draw on an unspecified contribution from the banking and insurance sectors to secure the necessary funding for the budgetary measures, together with the related statements by leading figures in the credit sector, best illustrate the distorting nature of the relationship between banks and the state, which today represents a major factor holding back the Italian economy. The banking system consistently holds just over 400 billion euros in government bonds, equivalent to just over 15 per cent of the total. The state returns the favour by providing guarantees on just under 300 billion euros of bank loans, thereby helping, on the one hand, to reduce loan losses and, on the other, to free up capital which, rather than being tied up in securing those loans, the bank can also return to shareholders in the form of dividends.

The state then attempts to make amends by taxing banking companies’ profits at a rate of 27.5 per cent (compared with the 24 per cent applied to other businesses), whilst accompanying this with a series of concessions designed to offset the higher rate. In this context, characterised by a clear quid pro quo, it should come as no surprise that the state proves to be a burdensome partner, requesting a contribution from the banking system in 2025 and reiterating the request twelve months later. There are many reasons to regard the taxation of so-called ‘extra banking profits’ as unreasonable and ineffective, but perhaps attention should shift to the broader relationship between the state and the banks and its consequences: it is, in fact, an entanglement that benefits no one. The bank, protected by the state’s guarantee, risks ceasing to act as a bank – that is, to assess creditworthiness (and it is no coincidence that the courts have begun to deal with guaranteed loans granted to already insolvent firms) – whilst the state, which finds a loyal buyer in national banks, partly evades market discipline. The country, however, suffers as a result. The implicit preferential treatment accorded to government bonds in the composition of bank portfolios penalises the accumulation of risk capital; the presence of bank guarantees helps to maintain the bank-centred nature of the system; and, on balance, it is fair to conclude that, as is often the case, it is the taxpayer who ends up footing the final bill. In short, what is the point of introducing instruments capable of inflating bank profits, only to then label them as ‘extra profits’ and tax them? The opportunity presented by the 2027 Budget Bill should therefore be used to begin unravelling the problem described above.

The sum of 5 billion euros demanded by the government from the banking and insurance sectors is not all that far removed from the equivalent value of the benefits accruing to the banking system from the existence of public guarantees on loans. Rather than merely defining the terms of payment (which may or may not be genuine: as the experience of 2025 should teach us), it would be appropriate to establish the principle that credit institutions wishing to waive public guarantees on loans – or, to avoid undesirable consequences, wishing to limit them to higher-risk businesses (the so-called rating categories 3 and 4) – should be exempt from the contribution, thereby also limiting the involvement of the state budget. Limiting the use of guarantees is necessary: as has been authoritatively observed, the proportion of performing loans to businesses backed by a public guarantee is three times higher than that recorded in other major European countries. Furthermore, for credit institutions that nevertheless wish to make use of them, it is urgent to price the guarantees differently. At present, the guarantee comes at little cost to those who obtain it. The one-off fee is 0.5 per cent of the guaranteed amount for small enterprises and 1 per cent for medium-sized enterprises, whilst for micro-enterprises – at least until the end of 2026 – and for enterprises in Southern Italy, it is free of charge. The 2025 Budget Law has also introduced an additional levy payable by banks that make heavy use of the Fund, but this is calculated on the basis of volume rather than quality. The rates set this year by the fund manager – 0.5 per cent and 1.5 per cent – are halved for those who lend primarily to businesses with lower credit ratings, which rewards risk-taking but says nothing about the care with which the bank selects its clients. It would be enough to change the criterion, shifting from ‘how much’ to ‘how’. And, if the government is seeking revenue, it could raise it in this way, charging those who use the guarantee well less than the average and those who use it poorly more. Finally, the indicators should be published annually on a bank-by-bank basis, because transparency is the primary form of regulation and leaves judgement to investors and customers. Pricing guarantees differently would mark the difference between a state that taxes banks’ profits simply because they are ‘large’ (an ‘extra’) and a state that stops subsidising those that are poorly structured. The former is a tax collector (which modestly refers to the levy as a ‘contribution’), whilst the latter is, at last, a guarantor that understands the value of its own signature.