This has narrowed the gap between national saving and investment which, as you know, is the counterpart to the current account deficit. The current account deficit in the December quarter fell to 2 per cent of GDP, and is likely to move lower in the immediate future.   Households became more cautious, shifting their saving from investments in securities towards bank deposits.
Given the severe tensions that have emerged on the international financial and Italian sovereign debt markets in recent months, the capital strengthening prompted by the Bank of Italy’s supervisory action has allowed Italian banks to maintain investor confidence and attract external finance at low cost.2 However, this may not be sufficient, on its own, to overcome the credit supply bottlenecks.