Managerial Insights
The Choices to Make between the Real Economy and the Banking Sector
In the considerable confusion that reigns concerning economics and finance since the outbreak of the Covid-19 pandemic, various types of measures have been proposed, discussed, and adopted. Those aiming to rescue banks, but also the real economy, are particularly important. These two phenomena are in fact strictly correlated, although the connection is not always clear, and they require different measures to be adopted following precise time sequences. The fundamental problem is knowing whether it is proper to rescue the banks first, and then the real economy, or whether it is better to first ...
Finance, Oversight, and Fraud: the case of Wirecard
In the month of June, the Wirecard scandal erupted in Germany. Let's recall the main events. Until that time, Wirecard was mostly known as a success story among companies that use technology to produce banking and financial services. These are firms that some love to call "financial unicorns:" the noun evokes the special nature - whether true or presumed - of the technology used, and the adjective the activity in the sector of banking and finance. But all of the sudden, a statement released by the Central Bank of the Philippines confirmed some important news: Wirecard has a budget hole of almost ...
Recovery Fund: How to Distribute the Resources among Member States?
The Member States of the European Union are currently engaged in difficult negotiations on the Recovery Fund, the fund of 750 billion euros whose purpose is to help European regions recover from the Covid-19 shock. The public debate is dominated by the question of "conditionalities," that is, to what extent the provision of the funds must be conditional upon specific economic policy choices by the beneficiary countries. Although important, this question risks overshadowing another decisive issue, that of the criteria for allocation of the resources among the Member States. Should the EU favor ...
The Solitude of the WHO
"They’re giving [the information] to us 15 minutes before it appears on CCTV," the Chinese state channel. This, according to Gauden Galea, the World Health Organization (WHO) representative in Beijing. His words clearly describe the UN agency's frustration toward China at the beginning of January, with the attempt to scrape up the little information available on the new coronavirus, the one that has now infected almost 12 million people around the world, provoking over 550,000 deaths. This statement is part of an account by the United States news agency Associated Press[1] that confirms the ...
The Solitude of the WHO
"They’re giving [the information] to us 15 minutes before it appears on CCTV," the Chinese state channel. This, according to Gauden Galea, the World Health Organization (WHO) representative in Beijing. His words clearly describe the UN agency's frustration toward China at the beginning of January, with the attempt to scrape up the little information available on the new coronavirus, the one that has now infected almost 12 million people around the world, provoking over 550,000 deaths. This statement is part of an account by the United States news agency Associated Press[1] that confirms the ...
Forecasting in Times of Uncertainty: It Can Be Done
The Covid-19 emergency has caused a strong change in the business models of companies in many sectors. For some of them it has simply been an accelerator, for others something absolutely new. It is inevitable that, faced with this path of evolution, control systems, that have the goal of supporting decision-making processes and orienting management behavior, cannot be left out of this change. In particular, in a context characterized by a high level of discontinuity with respect to the past and by high levels of uncertainty, above all traditional tools for forecasting results and setting goals ...
Forecasting in Times of Uncertainty: It Can Be Done
The Covid-19 emergency has caused a strong change in the business models of companies in many sectors. For some of them it has simply been an accelerator, for others something absolutely new. It is inevitable that, faced with this path of evolution, control systems, that have the goal of supporting decision-making processes and orienting management behavior, cannot be left out of this change. In particular, in a context characterized by a high level of discontinuity with respect to the past and by high levels of uncertainty, above all traditional tools for forecasting results and setting goals ...
Italian Banks Face the Text of COVID-19
What impact will COVID-19 have on Italian banks? This is the most frequent question in financial circles in these weeks. Today, there is no answer yet. It will take some time. A question we can ask, though, is: what is the condition of Italian banks today compared to the time of the previous crisis, that of 2008? We can answer this question. And actually, this is a first and necessary step to take in order to answer the initial question. We will divide our response into two parts. In the first part, we will analyze what Italian banks have done in terms of: improvement of asset quality, measures ...
Italian Banks Face the Text of COVID-19
What impact will COVID-19 have on Italian banks? This is the most frequent question in financial circles in these weeks. Today, there is no answer yet. It will take some time. A question we can ask, though, is: what is the condition of Italian banks today compared to the time of the previous crisis, that of 2008? We can answer this question. And actually, this is a first and necessary step to take in order to answer the initial question. We will divide our response into two parts. In the first part, we will analyze what Italian banks have done in terms of: improvement of asset quality, measures ...
Bank and Country, the Two Faces of Financial Nationalism
In the months that have just passed, in advanced countries the banks have been the chain of transmission of urgent policy interventions, designed by governments to sustain the aggregate demand for goods and services. Time will tell us what strategy is most effective. Let’s look ahead, though. To do so, like Giano, we will concentrate on what happened in Italy before the pandemic recession began. In at least two cases - that of the European Stability Mechanism (ESM) and that of the Banca Popolare di Bari - the Italian political class has been faced with a question that will certainly arise again ...