The long period of financial repression, that is, direct control on bank lending to the private sector and force-feeding banks with government debt instruments had made the core business of commercial banks safe between the mid-1930s and the early 1970s. Central banks’ function of maintaining financial stability by way of regulation and supervision had atrophied.
Various governments, including Italy’s, have taken action to mitigate the immediate effect on citizens’ well-being. Energy services are, in many respects, a primary asset; an increase in their prices weighs more heavily on the budgets of less well-off households, exacerbating ‘energy poverty’;25 and, in any case, it is not easy to adjust for in the short term.