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| PARIS: Italy’s finance minister suggested in an interview published yesterday that Italian banks were saved from the US subprime debacle because few financiers speak English. “Our banks suffered little from the subprime crisis. There are few of them where English is spoken. So their exposure to toxic assets therefore stayed extremely limited,” the minister, Giulio Tremonti, told Les Echos newspaper. “Today, our bankers are not asking us to come to their rescue,” he added. The US subprime crisis snared mostly American and other European banks, particularly British ones. “Subprime” refers to high-risk home loans which were repackaged as complicated securities whose values plummeted when the US housing market slipped into reverse. Tremonti, who is economy and finance minister, said that the capacity of the Italian economy to bounce back should not be underestimated. “One should be suspicious of GDP (gross domestic product) figures. Not only do they not include the informal economy, but, above all, a large part of the activity of our companies takes places outside of our borders,” he told the business daily. “Italian companies often have a holding group in Luxembourg, a brand registered in the Netherlands, a commercial structure in Switzerland or in Austria and investments in central Europe,” he said. Italy fell into recession last year, as defined by two consecutive quarters of contracting GDP. The economy shrank 0.5% in the third quarter after a fall of 0.4% in the April-June period. Regarding the Group of Eight (G8) rich countries, which Italy has just taken over as president, Tremonti said this “is no longer representative of the world in which we live”. He said that he is open to ideas on enlarging the group, but said the G20 was not perfect as a representative body either. – AFP |
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