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LA STAMPA

Risking A Run On Banks? In Italy, Euro Crisis Is Creating Nervous Banking Clients

In the small but wealthy town of Settala, near Milan, one community bank is spending extra time trying to calm a growing number of customers who worry that their savings are at risk in the face of Europe's deepening economic crisis.

Settala, Italy (Uberto)
Settala, Italy (Uberto)
Marco Alfieri

MILAN -- "Are you sure my investments are safe?" Everyone is asking the same question to Matteo R., a 42-year-old director of a bank branch in the village of Settala, 15 kilometers east of Milan.

Settala, for all intents and purposes, is a fairly wealthy village. There are 7,500 inhabitants and five banks, which would indicate there's plenty of money around. Most of Settala's residents live in single-family homes, as opposed to apartment buildings. Many have large cars. Still, residents here are jittery, rattled by crashing markets and news of the euro zone's sovereign debt crisis.

Italians have been burned before. Many suffered huge losses from their investments in Argentine Bonds, which turned into waste-paper when the country defaulted on its debt in 2002. Nowadays people are more cautious. "They are calling more and more," says Matteo R. "If a client has spare time, he or she comes directly to the bank. They want to know what's going on, they ask questions. Overall, they would like to be reassured. You know, it's a tough time."

Matteo R."s particular bank branch has a cash flow of 100 million euros, and around 2,000 clients. The clients include young couples with a mortgage to pay, wealthy retailers, craftsmen and professionals who have a bit of money to invest, retired people who have some savings, companies, entire families and a few people with large portfolios.

"People who work in small field office banks, manning the counters or in the back-offices, are going through terrible days," says Matteo R. "People are calling nonstop. They're stopping by to ask about their savings. Owners of small companies are asking for loans. Some people are cancelling their investments because they cannot afford anymore to pay even just 100 euros a month. Others are afraid of a default. In this case, we have to act not only as people's brokers and consultants, but also as their psychologists."

Suddenly short on cash

The effects on Main Street are immediate. The interest rates on Italy's sovereign debt act as a barometer tracking the costs of bank deposits. In Italy, banks are particularly important to small businesses. Companies receive roughly 91% of their funding from banks. Banks also issue about 40% of the country's home mortgages. "This situation means less money for families and companies," says Matteo R.

In Italy, the total amount of private savings is roughly 8.6 trillion euros, more than six times the country's GDP, estimated at 1.5 trillion euros. Savings are the country's life insurance. But the crisis and the market turmoil are changing people's habits. "Medium and long-term investments are being rationed. We are all short of liquidity," admits Matteo R. "Headquarters is asking us to gather money, but right now, people come to the bank only to ask questions -- or even to withdraw their savings."

This bank branch opened in the 1970s. Here the co-workers are like a family. They lunch together at the local San Giorgio restaurant or at Speedy bar. Seated at his desk, the director is busy fielding phone calls. "It was a client who wants to know if her 5,000 euros invested in inflation-indexed bonds are safe," the director explains, hanging up the phone. He adds that yesterday morning "a woman ran here to tell me she had read on Facebook that the state has the right to withdraw money from the bank account. She wanted to know if it was true."

The director has his own problems to worry about. "I arrived here last year to reorganize the office, but now I have to work like crazy," he says. The other day, the owner of a small company asked for a 25,000-euro loan in order to buy a van. "I had to say No," the bank director explains. "We are short of liquidity. I felt bad because I know him. He's a good guy. But the rules are strict."

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photo - Uberto

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Society

"Splendid" Colonialism? Time To Change How We Talk About Fashion And Culture

A lavish book to celebrate Cartagena, Colombia's most prized travel destination, will perpetuate clichéd views of a city inextricably linked with European exploitation.

Photo of women in traditional clothes at a market in Cartagena, Colombia

At a market iIn Cartagena, Colombia

Vanessa Rosales

-Analysis-

BOGOTÁ — The Colombian designer Johanna Ortiz is celebrating the historic port of Cartagena de Indias, in Colombia, in a new book, Cartagena Grace, published by Assouline. The European publisher specializes in luxury art and travel books, or those weighty, costly coffee table books filled with dreamy pictures. If you never opened the book, you could still admire it as a beautiful object in a lobby or on a center table.

Ortiz produced the book in collaboration with Lauren Santo Domingo, an American model (née Davis, in Connecticut) who married into one of Colombia's wealthiest families. Assouline is promoting it as a celebration of the city's "colonial splendor, Caribbean soul and unfaltering pride," while the Bogotá weekly Semana has welcomed an international publisher's focus on one of the country's emblematic cities and tourist spots.

And yet, use of terms like colonial "splendor" is not just inappropriate, but unacceptable.

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