21 st WSBI World Congress Kuala Lumpur, Malaysia Savings banks and Foundation, as supporters of...

21 st WSBI World Congress

Kuala Lumpur, Malaysia

Savings banks and Foundation, as supporters of

communities, municipalities and local authorities:

an Italian view

21 September 2006

Fondazione di Venezia

Prof. Giuliano Segre Chairman of

Fondazione di Venezia, Italy

Local governments are an organisational form of any society.

National States have been existing for a long time, but local communities represent a binding constraint that exist everywhere and have been also reinforcing everywhere.

In a civilised Country each piece of territory has to be governed: many government duties have a local scale and the modern local governments were borne in a similar fashion.

However, there exist many examples of local government forms that put down their roots in ancient times.

Nowadays every country are organised in local governments.



Country First level Second level Third level

Federal States

Germania 13.854 323 Belgio 589 10 Austria 2.359

Unitary States

Spagna 8.106 50 17 Francia 36.565 96 22 Irlanda 80 29 8 Italia 8.100 103 20 Danimarca 275 14 Grecia 1.033 50 Paesi Bassi 504 12 Portogallo 278 Regno Unito 433 37 Svezia 289 21 Finlandia 448 Lussemburgo 118

Totale EU 73.031 745 67

Local governments by country and geographic scale in Europe

In some cases local governments result from a re-organisation of national governments


In other cases local governments have been the starting point for building National States


In the modern age Local Authorities need fiscal revenues from citizens


The burden of local fiscal revenues over the total amount of taxes paid by citizens specifies the form of National State


2 - New Federal States 4 - New centralized States1 - Federal States 3 - Decentralized States 5 - Centralized States

0

5

10

15

20

25

30

35

40

45

50

Austri

a

Germ

ania

Austra

lia

Canad

a

Stati U

niti

Svizze

ra

Belgio

Spagn

a

Danim

arca

Finlan

dia Italia

Svezia

Giappo

ne

Grecia

Irlan

da

Regno

Unit

o

Franc

ia

Luss

embu

rgo

Paesi

Bassi

Porto

gallo

1975 1999

What does it happen whenever fiscal revenues are not enough for financing public expenditures?


In this case local governments may take out a bank loan


However to pay off a debt is not always an easy task


The relationship between debtors and finance system always has been difficult and is more difficult for local governments

In this case a Foundation may be a good allied with local powers


Indeed, this is the opportunity for the Foundation’s intervention


1) It could be a charity support


2) it may be aimed at improving quality of life


3) It also may help local economic development


4) or it could enhance the social development


In Italy foundations have different forms:

they are about 3,000.

In this framework, 88 Foundations

were borne in 1990 as a result of the privatization process that

underwent the 88 public banks existing at that time.


At the beginning, each Foundation owned the 100% of the capital stock of privatized bank. Today, after 15 years


Equity interest of banking foundations

1990 1995 1996 1998 1999 2000 2001 2002 2003 2004

A) Foundation with stake in bank > 50% 88 62 56 47 44 23 22 20 15 16

B) Foundation with stake in bank < 50% 0 26 30 36 36 57 57 59 63 58

C) Foundation with no stake in bank 0 1 3 6 9 9 10 10 11 14

Total 88 89 89 89 89 89 89 89 89 88


2004

16%

18%66%

> 50%

< 50%= 0%

1999

40%

50%

10%

> 50%

< 50%= 0%

1990

0%

100%

0%

> 50%

This kind of foundations act as normal foundations, but they use revenues generated by their assets for financing local activities as shown in the following figure


private entities

59%

local authority

23%

national public

entities18%

The following table shows as financing is distributed by sector of intervention


education3%

other15%

art8%

general grants51%

building23%

Same realizations


Compagnia di San Paolo

(Restauro Sala degli Svizzeri)

Fondazione Monte dei Paschi di Siena

(Azienda per Biotecnologie)


Ente Cassa di Risparmio di Firenze

(Progetto metropolitana leggera)



(Teatro La Fenice)



(Canaletto, Il trionfo della Veduta)

Foundations are no-profit organisations that operate in order to produce goods or services either that are not produced by the market or that governments are not able to provide


The experience of Italian Foundation is

useful for understanding future

development of Savings Banks System


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