Preparing San Marino’s banking and financial system for the new European dimension without waiting out the full timeframe granted by the Association Agreement. This is the position expressed by the Party of Socialists and Democrats (PSD), which has spoken out on the future of the sector ahead of the signing of the Agreement with the European Union, scheduled for October 19. The EU Council has already authorized the signing and provisional application of the agreement, which also covers financial services and provides for gradual access to the internal market, contingent on verifying the solidity of San Marino’s regulatory and supervisory framework.
“On October 19, San Marino will sign the Association Agreement with the European Union. This is no longer a prospect. It is a date. And from that date a new phase will begin, in which the country must be able to turn European integration into concrete opportunities for its economy. One of the first and most demanding tests will be that of the banking and financial system,” the PSD states.
The party focuses in particular on the timeframe envisaged for financial services. The Agreement in fact provides for a gradual path that can extend up to 15 years. For the PSD, however, that margin should not become a reason to wait: “It is a long time, designed to allow our system to adapt without shocks. But San Marino cannot afford to wait fifteen years. The goal must be to achieve, much sooner, a modern, solid banking system ready to compete in the European market.”
The party’s reasoning also touches on the securitization of non-performing loans, cited by the PSD as an example of a systemic response to a systemic problem. The International Monetary Fund has noted an improvement in the quality of bank assets and recoveries above expectations, while continuing to flag vulnerabilities related to the capitalization and profitability of some institutions.
This leads to a reflection on the role of politics. “In recent years, politics has rightly taken several steps back from managing the banking system. It was necessary. We have lived through periods when the relationship between politics and banks was too close. And we have paid for mistakes that must not be repeated. But stepping away from managing banks does not mean giving up on having a policy for the banking system. These are two profoundly different things,” the socialists and democrats emphasize.
According to the PSD, “the management of institutions belongs to the institutions themselves. Oversight, authorizations and supervision belong to the Supervisory Authority. But general direction and the choices affecting the future of a sector that is strategic for the country also belong to politics.”
A specific section is devoted to supervision, considered crucial on the European path. “We need a Supervisory Authority that oversees, but also one capable of guiding the system toward the new European dimension. One that can anticipate problems. One that can engage in dialogue with operators without giving up rigor. One that helps create conditions that make our system reliable, competitive and attractive.” This is an issue directly tied to the Agreement, since access to European financial services will also depend on a positive assessment of the robustness of the regulatory and supervisory framework.
For the PSD, a possible role for the State should not be ruled out from the outset. The party proposes exploring instruments through which public and private resources could jointly contribute, in compliance with European rules, to consolidation and development operations in the sector. “Not to replace the market. But to support a transformation that concerns the interest of the entire country and its ability to enter the European market more quickly and more strongly.”
Finally, on relations with Italy, the PSD identifies two distinct levels. On one hand, the technical table, with increasingly close cooperation between the Central Bank and Banca d’Italia; on the other, the political level concerning future financial relations between the two countries. “These are two different tables. They must move forward together. Building technical agreements is the task of the competent authorities. Turning those steps into an opportunity for the country is the job of politics.”
The conclusion returns to the role the party assigns to politics in this new phase: “October 19 changes the framework within which San Marino operates. We cannot simply wait for change to arrive. Politics must once again engage with the future of the banking system, without going back to managing the banks themselves. Europe is opening up a possibility. It is up to us to decide how to use it.”
