Recent Italian legislation adopting urgent measures to stabilise the banking sector

Gaudiana Giusti, Legal Country Head Italy – Legal and compliance, Credit Suisse Group

In the wake of the global financial crisis, the calls on individual governments worldwide to take action aimed at stabilising and increasing confidence in the financial markets have been heard far and wide. On October 3, 2008 US Congress approved the Emergency Economic Stabilization Act of 2008 (the “Stabilization Act”) proposed by former Treasury Secretary Henry Paulson, providing for a new course after a long season of unconditional trust in the market’s ability to self regulate. Under the Stabilization Act, the Secretary of the Treasury is given the powers to adopt a number of initiatives aimed at remedying the liquidity crisis, ranging from the ability to purchase toxic assets from financial institutions to the ability to invest directly in the banking industry. Indeed, this presents a complex political/institutional infrastructure aimed at ensuring legitimacy and accountability of the State in this new role as “rescuer” of the economy.