8|oomberg, 2 november 2011

Sara L|sen
Interv|ew w|th Corrado assera

ULS1ICN: Ckay, l'd llke Lo ask you abouL Lhe performance of lnLesa shares, down more Lhan 20 so far
Lhls year. Are lnvesLors over reacLlng here?
ASSLkA: Pard Lo say. 1he prlces Loday are very much far from any klnd of fundamenLals. So, cerLalnly,
lnLesa represenLs our counLry. So lL's a way Lo lnvesL agalnsL or ln favour of our counLry and, by deflnlLlon,
ln Lhe lasL few days, Lhe feellng of Lhe markeL abouL our counLry has been very negaLlve. 8uL we are noL
worrled ln Lerms of fundamenLals.

ULS1ICN: Accordlng Lo Lhe L8A resulLs LhaL we goL, lLallan banks, lncludlng lnLesa, are among Lhe weakesL
ln Lerms of caplLal poslLlon. And Lhls could be a problem. 1he lLallan 8anklng AssoclaLlon has crlLlclzed Lhe
meLhods used by L8A. WhaL's your vlew on Lhls?
ASSLkA: We are Lhe only lLallan bank LhaL wenL Lhrough Lhe sLress LesL very decenLly, l mean, no need for
furLher caplLal lncreases. So, havlng sald LhaL, l belleve LhaL Lhe klnd of sLress LesL Lhey declded Lo make ls
noL very wlse, because devaluaLlng Lhe holdlngs boLh ln Lerms of soverelgn debLs and ln Lerms of publlc
flnance, cerLalnly does noL help Lhe slLuaLlon. Convey Lhe message Lo Lhe markeL LhaL soverelgn debL can
defaulL and Lhls ls agalnsL whaL Lhe Luropean unlon and Lhe CenLral 8ank have kepL saylng. So lL's a very
lnconslsLenL message, lL penallzes banks LhaL are very much lnvolved ln Lhe real economy of our counLrles.
AnoLher reason ls LhaL lL's cerLalnly someLhlng LhaL cures more Lhe effecLs Lhan Lhe causes of Lhe crlsls. So
leL's solve Lhe soverelgn debL, leL's noL [usL look aL some of Lhe effecLs.

ULS1ICN: And whaL do we need Lo see Lo cure Lhe crlsls?
ASSLkA: robably aL Lhls polnL, we have Lo do someLhlng very slmple buL very sLrong, because clearly Lhe
Luropean unlon has underesLlmaLed Lhe Creek crlsls and now we are ln a corner. lf we wanL Lo geL ouL of
Lhls corner, we have Lo make sure and convlnce Lhe markeL LhaL, on Lhe one slde, each slngle counLry has
Lhe commlLmenL Lo keep lLs publlc accounLs ln balance, buL on Lhe oLher slde, Lhe Luropean parLners as a
whole and Lhrough Lhelr lnsLlLuLlons wlll supporL, ln Lerms of llquldlLy, all Lhe Lurozone parLners, for no
maLLer how long. 1he message has Lo be clear. We had Loo many lnconslsLenL messages ln Lhe lasL few
monLhs. ?es, buL, leL's go, no leL's sLop. now, Lhe commlLmenLs, boLh on Lhe counLry slde and on Lhe
Luropean slde, have Lo be slmple and clear.

ULS1ICN: And we're learnlng Lhls mornlng LhaL Lhe LlSl ls golng Lo delay Lhe bond sale. l mean, Lhere's all
of Lhese delays ln Lerms of crlsls managemenL.
ASSLkA: AbsoluLely, Lhls ls noL Lhe way Lo handle a crlsls of Lhls slze. 1he whole managemenL of lL has
been lneffecLlve and we have Lo learn from Lhese experlences and Lo become much more flexlble, much
more pragmaLlc, much more effecLlve. And Lhe message has Lo be Lhe one l menLloned before. 1he
Luropean parLners wlll supporL all Lhe oLher parLners, obvlously provlded Lhey Lake a very sLrong
commlLmenL ln Lerms of Lhelr publlc accounLs. And counLrles llke lLaly who already have a prlmary surplus,
Look Lhe commlLmenL Lo brlng Lhe publlc accounLs ln balance ln Lwo years, are a good example. So,
everybody should do lL, and everybody should supporL all Lhe oLhers, and Lhe markeL should have Lhls sorL
of confldence.

ULS1ICN: uo you have confldence ln Lhe 8erlusconl governmenL Lo be able Lo Lackle Lhls crlsls LhaL ls now
come Lo lLaly?
ASSLkA: no, we need a dlsconLlnulLy ln Lhe managemenL of Lhe counLry. l don'L know lf Lhls governmenL
can guaranLee Lhls dlsconLlnulLy or, more llkely, a naLlonal unlLy supporL Lhe governmenL. 8uL cerLalnly, a
dlfferenL sLrengLh, a dlfferenL commlLmenL has Lo be Laken boLh ln Lerms of publlc accounLs and, on LhaL
slde, we are performlng reasonably well. 8uL also on Lhe oLher slde LhaL ls very lmporLanL, LhaL ls growLh.
SusLalned and susLalnable growLh. lLaly can grow for a number of reasons and we have Lo Lrlgger all Lhose
elemenLs LhaL can guaranLee Lhls growLh and Lhe creaLlon of [obs.

ULS1ICN: 1he forecasLs for lLaly's growLh are sLlll very very anaemlc. So l'm [usL wonderlng how you
prepare for LhaL and whaL lL means for banks' proflLablllLy.
ASSLkA: CrowLh ln our counLry has been qulLe low for a number of years and, as you know, we proved
LhaL we can be proflLable also ln a low growlng envlronmenL. CerLalnly Lhe counLry needs more growLh and
we have Lo supporL all Lhe growLh-relaLed lnlLlaLlves. Cn our slde, our buslness plan provldes also for a
furLher reducLlon of cosLs, more producLlvlLy, more efflclency, a loL of new lnlLlaLlves Lo lmprove Lhe
proflLablllLy of Lhe bank. lor sure Lhe counLry can grow, globallzaLlon ls an opporLunlLy for a counLry llke
ours because, as you know, a number of lndusLrles LhaL wlll keep growlng have lLallan companles leadlng
Lhe paLh. Cn Lhe oLher slde, we have a number of lnvesLmenLs Lo make ln our counLry LhaL can be done
wlLh very good effecLs boLh on Lhe shorL Lerm and on Lhe long Lerm wlLhouL [eopardlzlng Lhe publlc
accounLs. We have a solld slLuaLlon ln Lerms of savlngs, ln Lerms of households wealLh. We have companles
LhaL are relaLlvely low lndebLed. So, Lhere are good reasons for bellevlng ln Lhe posslblllLy for growLh. We
need a plan, we need an overall managemenL of Lhls phase and only Lhe governmenL can provlde lL. All Lhe
enLerprlses, all Lhe enLrepreneurlal assoclaLlons have already glven Lhelr avallablllLy for LhaL.

ULS1ICN: 1here's a reporL Lhls mornlng LhaL Lhe 8ank of lLaly mlghL lnLervene ln Lhe bond markeL. uo you
know anyLhlng abouL Lhls?
ASSLkA: no, l'm noL aware of anyLhlng.

ULS1ICN: Should Lhey?
ASSLkA: l belleve LhaL cenLral banks are and wlll keep provldlng llquldlLy Lo banks. 1hey have done lL ln an
effecLlve way, Lhey should keep dolng lL, especlally Lo real economy banks, because we should noL keep
penallzlng banks LhaL are very much lnvolved ln real economy, very low leveraged, and very, l would say,
well managed as Lhe lLallan banks are. So l Lhlnk Lhey wlll conLlnue dolng whaL Lhey have been dolng ln Lhe
lasL few monLhs.

ULS1ICN: WhaL should Lhe LC8 do nexL? Should lL make anoLher move, llke lower lnLeresL raLes or boosL
Lhe amounL of money lL's prlnLlng?
ASSLkA: 1he Luropean CenLral 8ank ls becomlng more and more a real cenLral bank, noL only ln Lerms of
lnflaLlon conLrol, buL also ln Lerms of llquldlLy provlslon Lo Lhe markeL and sLablllLy of Lhe markeLs. l Lhlnk
Lhey should keep dolng whaL Lhey have been dolng ln Lhe lasL few monLhs. l don'L belleve lnLeresL raLes are
aL dangerous levels and LhaL we have ln any case such low levels ln Lerms of markeL deals, ln Lerms of Lhe
8l8C8 raLe, LhaL Lhere ls no need for furLher decreases.

ULS1ICN: Are you faclng any klnd of llquldlLy problem? Would you say LhaL we're ln a credlL crunch?
ASSLkA: CerLalnly for a number of banks ln Lurope, llquldlLy ls becomlng a very Lough lssue. Lucklly
enough we have ralsed our caplLal ln Llme, as you know, and we have puL some hay ln Lhe barns early
enough durlng Lhe year, and we have anLlclpaLed all our fundlng needs for 2011. We can even do wlLhouL
Lhe wholesale markeL for Lhls year and nexL year. 8uL fundlng ls cruclal and very dlfflculL for a number of
banks, and LhaL's why we are and wlll keep provldlng llquldlLy.

ULS1ICN: And so, you are flndlng access Lo Lhe credlL markeL commerclal paper lnLerbanks markeL?
ASSLkA: no, we have already fllled all our needs ln Lerms of fundlng, LhaL's whaL l sald before, especlally
Lhe commerclal paper markeL has decreased dramaLlcally and LhaL's why we have compensaLed Lhls lack
wlLh our sources. And l don'L see Lhe fundlng markeL becomlng easler ln Lhe nexL few monLhs for sure.

ULS1ICN: Pow long are you braclng for Lhls crlsls and Lhls conLaglon Lo lasL, how much longer are we
golng Lo have Lo go Lhrough Lhls?
ASSLkA: lL depends on Lhe way Lhe new phases of Lhe crlsls wlll be managed. 1he crlsls wlll noL flnlsh unLll
Lhe markeL recelves very clear messages and, ln Lhls case, Lhe messages have Lo be abouL Lhe commlLmenLs
of Lhe dlfferenL counLrles Lo keep Lhelr publlc accounLs ln balance and, on Lhe oLher slde, on Lhe wlll of Lhe
Luropean lnsLlLuLlons and Lhe Luropean unlon ln general Lo supporL Lhe LuroparLners. 1hese messages
have noL been conveyed yeL ln Lhe rlghL way.

ULS1ICN: Are you worrled LhaL Lhe lLallan Len year bond yleld ls aL 6.2 per cenL?
ASSLkA: CerLalnly, as a compeLlLlve dlsadvanLage versus a number of oLher counLrles makes Lhe cosL of
publlc debL hlgher, even lf lL applles only Lo a Lall of lL, because lL's only Lo Lhe new lssues, buL lL's
someLhlng we have Lo correcL very rapldly. And Lhls correcLlon can be done wlLh Lhe dual commlLmenL l
descrlbed before.