Monetary tightening is starting to take its toll on businesses

For Robert Nicastro, long-term banker – after having managed, between 2015 and 2017, the first bail-in case in Europe, with the resolution of the four banks in central Italy, Etruria, Marche, Ferrara and Chieti, he founded the fintech bank AideXa together with Francesco Sforza and others – there is, for now, no problem of financial stability in Europe. And the ECB, which is well aware of this, will raise rates again for this very reason at its next meeting on 4 May, contrary to the Fed, from which the markets are now expecting it to begin its decline. “Here in Europe the banks are more solid than in the past – he says in an interview with il Foglio – and this is demonstrated by the fact that the recent return of turbulence on the Stock Exchanges due to the precipitation of the crisis of the American bank First Republic has only slightly affected the gains that European credits have recorded since the beginning of the year. We know it: when the cost of money rises, the profitability of banks increases because it is favored by the improvement in interest margins. Not surprisingly, quarterly expectations are very good. The real problem is the credit crunch, ie the impact of the ECB’s monetary tightening on businesses, of which we are beginning to see signs in our country as well”.