Collateral in Italy: a legal and economic analysis of privileges, pledges and mortgages

Elisa Brodi ()

No 356, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The work presents a legal and economic analysis of how collateral works in Italy. Specific attention is focused on privileges, pledges and mortgages, because of the prominent role they play in banking relationships. The paper highlights the critical issues in the current legislative framework and discusses some recent regulatory changes. It argues in favour of a simplification of privileges, reserving them for involuntary or unsophisticated creditors. At the same time, it analyses the rationale of the recent modernization of pledges, which, among other things, allows debtors to retain control over an asset and to use it within the production process. The new repossession mechanisms are an important alternative to judicial foreclosure for liquidating collateral. However, fine-tuning them, along with creating appropriate safeguards tailored for debtors in difficulty, would make them more effective.

Keywords: collateral; banks; guarantees (search for similar items in EconPapers)
JEL-codes: K11 K12 K22 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-sog
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_356_16

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