Fabio Panetta: Italian banks - where they stand and the challenges ahead

Remarks by Mr Fabio Panetta, Deputy Governor of the Bank of Italy, at the Bank of America Merrill Lynch Italy Day Conference, London, 19 February 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1. The macroeconomic picture

In 2017 Italian economic growth strengthened considerably more than had been expected at the beginning of the year, while economic expansion became more balanced across demand components and economic sectors.

GDP has been supported by domestic demand. Households' consumption has benefited from steadily improving labour market conditions and rising confidence. Investment expenditure has grown at a robust pace, supported by positive demand developments and favourable economic policies, as well as by reduced uncertainty and growing confidence. Investment in productive capital has regained much of the decline recorded between 2008 and 2013; it is expected to attain pre-crisis levels next year. The recovery in the construction sector, while far from complete, has been continuing for some time.