Italy Eases Financial Penalties to Support Capital Markets

Italy is preparing to adopt a less punitive regulatory framework for financial companies as part of a broader strategy to revitalize its capital markets and increase the competitiveness of the Milan bourse. A new government decree, expected to receive approval this Thursday, will introduce mechanisms allowing firms to reach agreements with authorities through commitments rather than facing immediate penalties. Under the proposed rules, minor infractions—specifically those deemed insignificant or valued at less than 10,000 euros—may result in no sanctions at all. The legislative package aims to streamline regulatory processes by giving companies the option to negotiate the scale of financial penalties. Officials indicate that these changes are designed to provide supervisory bodies with more room for maneuver while speeding up the resolution of irregularities. Junior Treasury Minister Federico Freni, who played a central role in drafting the measures, noted that the administration wants market participants to view regulators as partners rather than adversaries. > Supervisory authorities have often been wrongly perceived as repressive and uncooperative. The push for reform comes as the Milan stock exchange struggles to keep pace with global competitors. Data from the market watchdog Consob shows that the exchange's market-capitalization-to-GDP ratio was just 48% at the end of 2025, a level significantly lower than most other advanced economies. In addition to the sanction reforms, the government is weighing a reduction in the legal liability faced by senior officials at Consob and the central bank for damages arising from serious misconduct. While under consideration, these adjustments to liability protections are not expected to be included in the decree scheduled for this week.