Beppe Grillo's Blog

Banks worse than tax collectors. Interview with Beppe Scienza.

Interview with Beppe Scienza
(09:30)

What’s the use of Italian banks? This question that is simple, so simple, has many replies, and none of them is reassuring for the saver. If the parties are the waiters of the bankers, the bankers, on behalf of whom do they operate? For whom are they serving at table? Who is pulling the strings of the great bankers of the world of finance, from Passera to Geronzi? What is the real power of these folks? Judging from the end that has befallen Arpe and Profumo, who were sacked between the morning and the evening, not a lot. Some of them last longer than the others because they are more functional to the system. The banks are responding to higher interests. Interests that are unknown to most people. They invest savers’ money in black holes, as happened with Telecom, with Alitalia, and with Air One. Grants thrown down the toilet but provided by using the money of current-account-holders, of those who deposit their savings. The banks always know today what their clients will know tomorrow. This is the trick that allows them to sell the derivatives with a hole inside or to give advice about the purchase of Parmalat bonds right up to an hour before they go bankrupt. The banks can give advice; can sell shares in companies with non-existent value, as happened with Saras, whose shares were immediately devalued by the market, without ever risking anything.
The Italian banks are a de facto monopoly. Their services have a cost that is higher (often much higher) than European banks. They are at the service of politics and the lobbies. They provide financing for cement and nuclear power stations, TAV, and the Messina Bridge, but to get a loan for a small-scale entrepreneur for his company or a mortgage for a family is worse than climbing Everest. The banks decide whether a company lives or dies, whether a territory is destroyed or regenerated.

Interview with Beppe Scienza of the Mathematics Department in the University of Turin

Banks, the real enemy
”I am Beppe Scienza, and I specialise in mathematics and money, in financial mathematics and today we are talking about taxes, about taxes because the topic is always interesting for Italians. Italians hate the taxman. I’m not going to discuss whether this hatred is justified, whether it is exaggerated, about which there is speculation; however, there’s one thing that needs clarification. For savers the true enemy is certainly not the taxman, but in general it is the banks, the financial system, the investment funds that are taking away money from the savers, much more money than the taxman takes. The discussion relating to savers concerns the managed savings, and in particular investment funds that are relevant to about 10 million Italian savers and I want to say a few words to start off with. This time I don’t want to quote my own data, but figures from another source: ‘Mediobanca - Research Department’ and here there’s something to be said: because some people think of Mediobanca and they say: well just think, there’s Cesare Geronzi, the Ligresti family, what sort of people are these? I’m not going to discuss that. I understand very well that one may turn their nose up at these people. However, apart from Mediobanca itself, there is ‘Mediobanca - Research Department’ and this is led by a person who is unknown to most people but to whom the Italian savers should create a monument. He’s Fulvio Coltorti, a reserved person, an academic, a researcher, a really capable economist who doesn’t enjoy publicity, a person who is adamantly honest. For almost 20 years, each year with his research office he puts the Italian investment funds under a microscope and what is coming out are accusations that they would not be able to save themselves from if it weren’t for the Italian press which is an accomplice in helping the band, the wrecker of managed savings. Thus I am taking as my reference point the figures from the Mediobanca annual report.

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Comments

There have been scandals in the financial sector - pensions, endowment mortgages, enron etc - before the financial crisis suddenly made people aware that the bankers were playing with our money on a "we win you lose game." They take annual fees regardless of the performance of the funds under management. But the main problem is the loss of confidence in the banking sector. In many countries people are removing their investment from funds since they do not know what happens to the money. Europe has announced some tiny adjustments to hedge funds but without any real change to how they do their business from tax havens with money that few know the origins. There has to be a total transformation of the financial system with the introduction of a tax on transactions in the currency, stock and commodity markets with a consequent reduction in taxes on the people.

Posted by: peter fieldman | October 21, 2010 01:13 PM