Finance
Italy to soften sanctions in bid for smoother relations with markets
Published by Global Banking & Finance Review®
Posted on February 26, 2026
2 min readLast updated: February 26, 2026
Tags:Capital Markets
Quick Summary
Italy plans to ease financial sanctions by enabling commitments instead of fines and waiving penalties for minor breaches. The reform seeks faster cases and a more attractive Milan market, with officials like Federico Freni backing the shift.
Italy Plans to Ease Financial Sanctions to Improve Market Relations
ROME, Feb 26 (Reuters) - Italy plans to adopt a less punitive approach to the way it sanctions irregularities by financial companies, sources said, as part of steps to address issues holding back the country's capital markets and boost the appeal of the Milan bourse.
Commitments as an Alternative to Sanctions
Key Changes in Italy’s Sanctions Regime
A decree to be approved on Thursday gives firms the possibility to agree to commitments with the authorities as an alternative to sanctions, and envisages imposing no sanctions at all in the case of minor infringements, the sources said.
Negotiated Fines and Faster Oversight
Other rules will give companies the option of reaching an agreement with the authorities on the amount of the sanction, the officials said, adding that the whole package is aimed at speeding up regulatory proceedings and giving authorities greater room for manoeuvre.
Penalty Threshold: Infringements Above 10,000 Euros
One of the main drivers of the package is the principle that penalties apply when the infringement is significant and worth more than 10,000 euros ($11,802.00).
Shift in Supervisory Approach
Junior Treasury Minister Federico Freni, who helped draft the package, said last month the government was trying to make the market consider supervisors not as an enemy but as an ally.
"Supervisory authorities have often been wrongly perceived as repressive and uncooperative," he said.
Freni Considered for Consob Leadership
Freni, who comes from the right-wing League party, is among candidates to replace Paolo Savona as head of market watchdog Consob.
Market Context: Milan Bourse’s Lagging Metrics
The Milan bourse lags behind most of its peers. Its market-cap-to-GDP ratio stood at 48% at the end of 2025, among the lowest in advanced economies, according to Consob data.
Liability Rules for Regulators Under Review
The government is also considering softening legislation that holds leading officials from Consob and Italy's central bank liable for damages in cases of serious misconduct.
Changes Not Included in Thursday’s Decree
However, changes to this measure are not expected to be part of Thursday's decree, the sources said.
Exchange Rate Reference
($1 = 0.8473 euros)
(Reporting by Giuseppe Fonte, editing by Gavin Jones)
Key Takeaways
- •Decree would allow firms to offer commitments as an alternative to sanctions.
- •Minor infringements may carry no penalties; significant breaches start above €10,000.
- •Authorities could negotiate sanction amounts to expedite proceedings.
- •Reform targets a more attractive Milan bourse and stronger capital markets.
- •Junior minister Federico Freni backs viewing supervisors as allies; he is a contender to lead Consob.
Frequently Asked Questions about Italy to soften sanctions in bid for smoother relations with markets
1What is the main topic?
Italy plans to soften enforcement of financial-sector sanctions, allowing commitments in lieu of fines and exempting minor breaches to make markets more efficient and attractive.
2How will the sanctions regime change?
Authorities could accept negotiated commitments, waive penalties for minor infringements, and settle sanction amounts to speed up proceedings and add flexibility.
3When is the decree expected?
Officials indicated approval was planned for Thursday, February 26, 2026, as part of a wider effort to boost Italy’s capital markets.
