Interview with Yves Mersch – Part Four
Italian banking system

You have just concluded meetings at the Bank of Italy. What did you discuss? How do you rate the health of the Italian banking system?
All these matters were part of the discussion with Italian colleagues. Italy has a wealth of experience. I rely on their knowledge. There is respect for the way it has managed in a difficult environment. I always value the Italian experience, which should be an important part in European decision making. On the Italian banking system, as long as I have no mandate I hesitate to give an opinion on somebody else's competence. The Italian supervision deserves respect.

The Italian banking system has its share of problems, but needed less public money in the crisis.
This has also to do with the structure of the Italian economy. The real estate sector is in a less dramatic situation than in other countries. The indebtedness of the household sector is also not a cause of concern. The banking sector has a need for adjustment and there has already been achieved a lot of progress. One has to ask if this is the end of the road or some more needs to be done.

One major problem in the banking sector was MPS. Would you say that if the new SSM had already been in place, this could have been avoided?
It's a very difficult question for me to answer. It would presume that I have a detailed knowledge of this dossier, which I do not. My knowledge is that so far I have not detected a shortfall of supervision. And you will never be able to avoid fraud. You will always have cases where, also in the future, there will be attempts to circumvent the rules. You cannot give a blanket guarantee that there will never be difficulties in the banks.

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