Bank loans, which are mostly indexed to the euro or other foreign currencies, carry lower interest rates than those in domestic currencies. In the short run they are attractive to borrowers but expose them to a severe exchange rate risk, with potential financial and reputational repercussions on the banks.
I have repeatedly called attention to the need to complete the reform of the governance of Italy’s cooperative banks. The aim, which I believe is generally shared, is to release the extraordinary potential of these institutions, make sure their corporate bodies are satisfactorily representative, not to question their cooperative mission.