La medición de los derechos y el acceso

Between 1990 and 1992, several Parliamentary Acts consolidated the Amato Law, resulting in a complete change of the legal framework for banking.203 The Amato Law (218/1990) formed the basis of the legal framework and paved way for the privatisation of the Italian public banking system.204 In 1993, the Legislative Decree 385 of 1st Sept 1993 (the 1993 Banking Law), replaced the 1936 Banking Law and consolidated all previous legislation in the banking industry. Under the 1993 Banking Law, previous distinctions between deposit banks and long-term specialised credit institutions were abolished and a model asymmetric to universal banking established. This was the start of a new era of consolidated supervision in which banking groups were formally recognised and non-bank financial intermediaries were incorporated in the regulatory framework.

Article 2 ( title 1) of the 1993 Banking Law deals with credit authorities and section 1 assigns the highest supervisory authority for credit and the protection of savings to the Inter-ministerial Committee for Credit and Savings. The Inter-ministerial Committee for Credit and Savings decides on matters assigned to it by the Legislative Decree 385 and is composed of the Minister of the Treasury (its chairman) and seven other ministers from other government sectors. The Governor of the Bank of Italy has to attend these meetings and the meeting may also be attended (on invitation by the Chairman), by other ministers.

199

Ibid p 211

200

Ibid p 212

201 _{G Trequattrini Banca d'Italia} 202

ibid

203

F Carnevali p 184

204

See Deutsche Bank, 'Italy's Savings Banks: First Reforms Create Big Universal Banks with Untapped Potential' EU Monitor Financial Market Special Deutsche Bank Research November 25 2004 No 17

Article 4 of the 1993 Banking Law states the duties assigned to the Bank of Italy during the course of performing its supervisory functions. These duties include: the formulation of proposals for resolutions within the scope of the authority of the Credit Committee, the issue of regulations in cases provided for by law, issue of instructions and adoption of specific measures within the scope of its authority. It is also required to establish and give prior public notice of principles and methods relating to its supervisory activity, to establish time limits for the adoption of measures and publish an annual report on its supervisory activity. Article 5 (1) states the objectives and scope of financial supervision and this includes: the sound and prudent management of those subject to supervision, the overall stability, efficiency and competitiveness of the financial system.

Title 3, chapter 1 of the 1993 Banking Law deals with supervision of banks. Its provisions include reporting requirements,205 notification by boards of auditors and persons appointed to audit the accounts,206 regulatory powers of the Bank of Italy,207 and inspections208. Title 3, chapter 2 deals with supervision on a consolidated basis and contains provisions relating to reporting requirements, regulatory powers of the Bank of Italy and inspections in Articles 66, 67 and 68 respectively.

Per capita GDP in Southern Italy is about 30% lower than national average with unemployment rate being around 18% - compared with 6% in the central parts and 3.8% in the north.209 By the early 1990s, the South was a dependent economy structurally, with 36% of Italy’s population.210 During the recession of 1992-93, the reduction of domestic demand and interest rate adjustments required to face the crisis affected the profitability of firms. As a result of difficulties experienced by the southern banking system, supervisory action was required from the Bank of Italy and this was aimed at fundamental aims of protecting depositors and maintaining financial support for businesses in the south.211 Between 1990 and 1995, on site controls were undertaken in the southern banking system and around 60% negative evaluation received – in contrast to 15% received by banks in the central and northern parts of Italy. The process of rehabilitating southern 205 Article 51 206 Article 52 207 Article 53 208 _{Article 54} 209

See Carosio, 'Italy, Europe and Financial Regulation'

210

A Goglio, 'Sectoral Regulatory Reforms in Italy : Framework and Implications'

211

A Fazio, 'The Reorganisation of the Italian Bank System' (Joint Session of the Sixth Committees of the Italian Senate and Chamber of Deputies 10 October 2002)

banks was aided through the Interbank Deposit Protection Fund and contribution from banking groups. One of such banking groups included Banco di Napoli. As the leading bank in South Italy, it had acted to support the southern banks and had been slow in adapting back – particularly in the face of an increasing competitive market.

The need to prevent a serious impact on the South’s economy, avoid systemic risks required special legislation to be approved for the rescue of Banco di Napoli. As a result, Law 588 of 19 November 1996 was enacted and it provided for the Treasury to supply funds for recapitalisation. This was a unique occurrence as it was the first time public intervention had been made to adopt a restructuring plan which was approved by the Bank of Italy. Banco di Napoli’s structures were renewed and factors which resulted in its crisis (factors such as bank loan portfolio, high costs and low efficiency of its operations) were corrected to align it with national average requirements. In addition to these developments within the legal framework, the 1998 Consolidated Law on Financial Intermediation has also enabled intermediaries to offer a wide range of asset management products.

7.4.7 The Central Bank’s Role in Financial Regulation and Supervision: Post