Tuesday, 30 September 2008

Italy can weather credit storm

Treasury constantly monitoring financial developments
(ANSA) - Rome, September 30 - Italian banks currently have enough cash on hand to allow the country to weather the international credit crisis, the Treasury said on Tuesday.
In a statement issued after a meeting of its special financial stability committee, the Treasury said ''the consequences (of the crisis) on Italy's banking system and insurance sector remain under control and the liquidity of Italian banks is adequate''.
The watchdog committee is chaired by Economy Minister Giulio Tremonti and includes Bank of Italy Governor Mario Draghi, Treasury Director Vittorio Grilli, the chairman of the insurance sector authority ISVAP, Giancarlo Giannini, and the head of the stock market authority Consob, Lamberto Cardia.
The committee, which has been meeting almost daily, said that while the repercussions of the crisis on Italy were contained, ''it is best to keep the situation under constant observation''.
Tremonti is set to report to the house on the credit crisis on Thursday morning. ITALIAN ECONOMY IS SOUND, FRATTINI SAYS.
Italy's condition to weather the financial crisis was also confirmed on Tuesday by Foreign Minister Franco Frattini. ''Fortunately, Italy has a sound financial setting. We do not have banks or insurance companies plagued by debt because we are a country which manufactures. Our industry protects us,'' Frattini said.
Some concern over the effects the US-based crisis will have on the Italian economy came from Fiat CEO Sergio Marchionne who said on Tuesday that the group's stock value and sales would suffer.
''For sure it (the credit crisis) will have an effect on us and right now no evaluations or forecasts can be relied upon,'' Marchionne said.
Nevertheless, he added that Fiat ''has a solid financial position which will allow us to cover our needs''.

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