During the 44th “Intelligence on the World, Europe and Italy” Forum, at Villa d’Este on September 7, 8 and 9, 2018, a study entitled “The end of the ECB’s Quantitative Easing: what impacts on public debt and the banking system” has been presented.
The study, “The End of the ECB’s Quantitative Easing: The Impact on Public Debt and the Banking System” updates and integrates the documentation presented at the Finance Workshop in April 2018.
The objective of the study is to examine the potential development of Italy’s public debt situation, including in light of recent announcements regarding the end of the Quantitative Easing practiced by the ECB over the last three years. To analyze these dynamics, a model was developed which, on the basis of a number of external inputs (GDP growth rate, fiscal policy and variations in interest rates), provides estimates of the possible evolution in the debt/GDP ratio in a range of scenarios.
The model does not provide forecasts, but rather estimates of what could occur in each scenario. The study also analyzes the potential impacts on the banking sector.
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