Preparing San Marino’s banking and financial system for its 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 weighs in 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 authorised the signing and provisional application of the agreement, which also covers financial services and provides for gradual access to the internal market, subject to verification of the robustness 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, one 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 time window provided for financial services. The Agreement in fact envisages a gradual path that could last up to 15 years. For the PSD, however, that margin should not become a period of simply waiting: “It’s a long time, designed to allow our system to adjust without shocks. But San Marino cannot afford to wait fifteen years. The goal must be to achieve a modern, sound banking system, ready to compete in the European market, much sooner.”
The party’s reasoning also touches on the securitisation of non-performing loans, cited by the PSD as an example of a response to a systemic problem. The International Monetary Fund has noted an improvement in the quality of bank assets and recoveries higher than expected, while continuing to flag vulnerabilities linked to capitalisation and profitability at 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. That was necessary. We have experienced periods in which the relationship between politics and banks was far too close. And we have paid for mistakes that must not be repeated. But stepping back from managing the banks does not mean giving up having a policy for the banking system. These are two profoundly different things,” the Socialists and Democrats stress.
According to the PSD, “the management of institutions belongs to the institutions themselves. Oversight, authorisations and supervision belong to the Supervisory Authority. But the general direction and the choices concerning the future of a sector that is strategic for the country also belong to politics.”
A specific section is devoted to supervision, considered a decisive factor in the European path. “We need a Supervisory Authority that exercises oversight, but also one capable of guiding the system towards its new European dimension. One able to anticipate problems. One able to engage in dialogue with operators without giving up rigour. One that helps create conditions capable of making our system reliable, competitive and attractive.” This is a theme directly tied to the Agreement, given that access to European financial services will also depend on a positive assessment of the robustness of the regulatory and supervisory framework.
For the PSD, the possible role of the State should not be ruled out from the outset either. The party proposes considering tools through which public and private resources could work together, in compliance with European rules, to support consolidation and development operations within the sector. “Not to replace the market. But to support a transformation that concerns the interest of the whole country and its ability to enter the European market more quickly and from a position of strength.”
Finally, there is the relationship with Italy, for which the PSD identifies two distinct levels. On one side, the technical table, with increasingly close cooperation between the Central Bank and the Bank of Italy; 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 take charge of 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.”
