Public debt, Italian banks increasingly cautious. In the portfolios of institutions less than 22% of bots and BTPs
How has the behavior of Italian banks changed with respect to the country’s public debt from January 2020 to today? How many bots and bots are there in the wallets of credit institutions and how much they are worth as a percentage of the total government bonds in circulation? If in January more than four years ago, a few weeks before the start of the Covid pandemic, the country’s credit institutions held bot and btp for approximately 628 billion euros equal to 25.7% of the total, today the amount is in fact similar, around 632 billion, with the share, however, having fallen to just under 22%. Over the course of these four years and three months, the banks’ attitude towards the purchase of Italian government bonds has changed and is oriented towards greater prudence, even if the banking sector remains a guarantee for the purchases of bonds issued by Treasure: the record was reached in April 2020, in full lockdown, when the banks reached, then with 687 billion, almost 28% of the total, while the highest peak, in absolute terms, was reached in June 2022 when there were more than 712 billion in the banks’ portfolio of bots and btp.
Here, below, i details year by year. In January 2020, public debt held by Italian banks amounted to 628.53 billion euros, corresponding to 25.7% of the total outstanding. This value saw a constant increase until May 2020, reaching €696.28 billion (27.7%). Subsequently, there was a slight decrease, with the value falling to €654.22 billion (25.4%) in December 2020. 2021 showed a fluctuating trend. In January, the value had risen to 668.86 billion euros (25.7%), with a peak in February of 681.41 billion euros (25.8%). However, from March onwards, the amount started to decrease, with a value of €659.28 billion (24.6%) recorded in December. The year 2022 saw an initial increase again, reaching a high of €712.08 billion (25.7%) in June. After this peak, the value started to gradually decline, with €688.90 billion (25.0%) in December. In 2023, the trend was characterized by a downward trend. From an initial value of 687.45 billion euros (25.0%) in January, a continuous reduction was observed until reaching 650.18 billion euros (22.7%) in December. In the first months of 2024, public debt in the hands of Italian banks continued to decrease, with 632.34 billion euros (22.2%) in January and 632.39 billion euros (21.9%) in March.
From the analysis of the data it clearly emerges that the exposure of Italian banks to public debt has dropped significantly in recent months. As of March 2024, the percentage of public debt held by Italian banks fell to 21.9%, compared to 27.8% in April 2020. This decrease may be indicative of a risk reduction strategy by banks, probably in response to various economic, financial and political factors. A more prudent attitude which, in any case, does not seem capable of having significant implications for the management of the Italian public debt nor effects on the stability of the national banking system. It should be noted that in recent days, the performance of the stock market values of Italian banks has been negative. This result appears to be the effect of the outcome of the European elections of 8 and 9 June, which brought some surprises in particular in France, but also in Germany, with the consequence that the sudden instability of those two countries could have repercussions financial markets on the rest of Europe.
France, in particular, will go to the vote in less than three weeks to re-elect both the Parliament and the government and this scenario has cast a shadow on the future structure of the European Union. This resulted in growing concern on the part of the international financial markets which first concerned France and then spread, with a sort of contagion effect, to other economies and public finances of the Old Continent. It should be noted that the banks’ lower exposure compared to the “Italian” public debt is a condition that could protect them, in the coming weeks, from tensions on the financial markets and in particular from the consequences linked to the trend of the spread between BTPs Italians and German Bunds.
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