Coronavirus, Bankitalia: “Strong sales of BTP by foreign investors. The reductions have reduced Italian wealth by 140 billion”

In the first three months of this year “the strong fluctuations in government bond yields and me reductions in stock and bond prices“They have decreased the wealth from Italian families over 140 billion, “Equal to 3.2% of its value at the end of 2019”. It is the estimate of the Bank of Italy, which in its last Financial stability report It also highlights how from the end of February to contribute to the expansion of the spread between Btp and the Bund there has been “big sales of Italian government bonds by the Foreign investors“

Bankitalia indicates that approximately half of households’ financial portfolio is allocated in instruments (public and private bonds, stocks, mutual fund units, pension funds and insurance products) whose value is exposed to market tensions. Investments in these activities are high, especially for nuclei with incomes above the median, but they are not insignificant, even among others.

In the coming months, the report notes, “the financial wealth of lower-income (below median) households could decrease considerably for the need to have disinvest activities so absorb the sharp drop in revenue; around two thirds of these families have financial assets to less than 5,000 euros. The growth rate of theindebtedness to banks, close to 3% a year in February, is expected to decrease as a result of the pandemic: the impact on credit of the reduction in the number of property sales and contraction of spending on durable consumer goods should more than offset both the decrease in payments associated with the mortgage moratorium, and any increase in the demand for liquidity to soften the effects of the fall in income on consumption. “