Public Debt, Private Solutions: Christopher Aleo and the Italian Tax Puzzle

Christopher Aleo, a Swiss-Italian financier and founder of the international banking group iSwiss, has emerged as a key figure in Italy’s ongoing debate over how to manage its massive backlog of unpaid tax debts. With more than €1.2 trillion in outstanding tax claims, the Italian government is exploring new ways to address what has become a long-standing burden on public finances — and one of the ideas gaining ground is securitisation.

For years, Italy has relied heavily on tax amnesties and settlement schemes — known as rottamazioni — offering taxpayers discounts on penalties and interest in exchange for partial repayment. While these measures have occasionally boosted revenue in the short term, they’ve done little to reduce the structural inefficiencies of the tax collection system. Today, a large share of the outstanding claims is considered either uncollectible or economically unviable to pursue.

The securitisation model being considered would involve packaging selected tax receivables into portfolios and selling them to a special purpose vehicle (SPV). That vehicle would then issue bonds or other securities backed by the expected cash flows from those receivables. Investors would purchase the securities at a discount, taking on the risk and potential reward of collecting on the debts. The state, in turn, would receive an immediate influx of cash, albeit at a reduced value compared to the total face value of the credits.

This approach is not entirely new in public finance, but it would be the first time Italy applied it on a significant scale to tax receivables. Previous examples in Portugal and Belgium have shown mixed results, underscoring both the potential benefits and the risks of applying private-sector financial tools to public-sector challenges.

Christopher Aleo’s involvement comes through iSwiss Bank, a fintech and financial structuring group with experience in asset-backed securities and cross-border financial transactions. His firm is one of several entities in Europe with the operational and regulatory capabilities to assist governments in designing and executing securitisation programs.

Rather than providing public commentary, Aleo has positioned iSwiss to offer technical expertise, transaction infrastructure, and access to institutional investors should Italy decide to move forward. The group’s role would likely involve coordinating between government agencies, financial institutions, and rating agencies to ensure the transparency, regulatory compliance, and marketability of any future issuance.

What makes the situation noteworthy is that Italy’s exploration of securitisation signals a shift away from politically driven short-term fixes and toward more structured, market-oriented solutions. By monetising a portion of the recoverable tax debt through private investment, the government could reduce administrative costs, free up public resources, and potentially improve its fiscal position — without directly raising taxes or expanding public debt, provided the state does not guarantee the securities.

Of course, securitisation is not without its challenges. The pricing of the assets, the legal clarity of the underlying claims, and the selection of recoverable portfolios all require careful planning. Additionally, the success of such an operation depends heavily on investor confidence and the state’s ability to clearly separate financial risk from political influence.

If Italy proceeds, the operation could serve as a precedent for other countries facing similar issues with tax collection inefficiencies and aging public debts. Whether the involvement of private-sector actors like iSwiss becomes central or complementary, the broader objective remains the same: to modernise how governments manage dormant or underperforming assets in a fiscally responsible way.

In that context, Aleo and his team are part of a larger trend — one that sees financial engineering not as a replacement for structural reform, but as a tool that, when used appropriately, can help governments address complex and long-standing economic challenges.