Italian cabinet set to discuss Covip bill
ITALY - A bill to combine the pension and market regulators Covip and Consob – and other bodies - into a single authority for the protection of investors and savers will be put before the cabinet on Friday January 30.
The bill, presented on Tuesday by finance minister Giulio Tremonti, comes in a bid to protect savers, enhance transparency and improve business confidence and will probably be presented to the cabinet next Friday, said an official at the Ministry of Finance and Economy who declined to be named.
Consob, the Commissione Nazionale per le Societa’e la Borsa, would “keep its current powers” and handle the responsibilities of the pension regulator Covip, the Commissione di Vigilanza dei Fondi Pensione, and its insurance counterpart ISAP.
The new authority would also “ absorb” some of the power of the Banca d’Italia in matters such as “the relationship between banks and customers” and “transparency of contracts regulating payments of money into the banks”, the official explained.
Banca d’Italia would still supervise bank competition and the stability of deposits.
“Everything connected with supervising the bank-customer relationship, for instance controlling the issue of bonds by a bank, will be shifted to the new authority. Basically the new, bigger Consob, would be set up to protect above all savers but also transparency and avoid conflicts of interest.”
According to reports in the Italian financial press, the new body would be called the Authorita’ per la Tutela del Risparmio, or the Authority for the Protection of Savings.
Financial daily Il Sole 24 Ore said the body would be aided by the financial police, Guardia di finanza – and that its head would be chosen by parliament and not the government.
But the new move does not convince a person familiar with the situation, who said that ”straightforwardness would be more to the purpose”.
“Rather than a 500-page -prospectus, probably written in English, Italian investors should be given a one-page document, clearly stating the amount of risk involved.”
The expert, who declined to be named, said in an interview that the Italian system did not lack channels of control and supervision.
“It includes seven different ones, in fact, from auditors up to Consob and Banca d’Italia. It would be more hopeful if something life the English FSA was instituted,” the person said.
“The draft of the bill leaves me very cold,” the person continued. ”I don’t believe in trying to stop a thief by getting more safes - the thief will eventually find a way to open them. It’s all about doing business ethically.”
Meanwhile, it has emerged that senate’s labour committee is considering a change in the pension reform devised by welfare minister Roberto Maroni.
Rather than pushing the number of years of pension contributions required for a statutory pension from the current 35 to 40 in 2008, the government was reported to be considering the “quota 95-96”. This refers to the total of a worker’s age and the number of years of pension contributions.