The markets have already anticipated the likely decision by the European Central Bank to lower interest rates later this year by the crisis caused by the security situation in the Red sea is of concern, said Italian Banking Association (ABI) chairman Antonio Patuelli on Saturday.
"The risks (of the Red Sea crisis, ed.) are real," Pateulli told the Forza Italia Economy Forum in Milan.
"The first is the one the Italian foreign minister is fighting, because if the Red Sea and the Suez canals are blocked, the Mediterranean will become a big salt lake open only to what were called 'the Pillars of Hercules', with an increase in costs and inflation , and with monetary policies that would pose very big question marks," he continued.
Patuelli said "the market has already brought down (interest) rates, with the interest rate swap (IRS) on 10-year mortgages falling from 3.52% to 2.68% and the yield on the 10-year Btp (Italian treasury bond) dropping from 4.99 % on October 18 to3.82% last Thursday".
For this reason, the ABI chief said he considers the "defensive initiative taken by Foreign Minister Antonio Tajani together with the other available European countries" to avert the risk of a blockade of Suez to be fundamental.
"We are living with two wars on our doorstep, and the combination of these three factors makes Italy the most exposed country" for geographical reasons, continued Patuelli.
Photo: Bank of Italy Governor Fabio Panetta (L) ABI PresidentAntonio Patuelli (R).
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