The banking system and the financing of southern Italian firms

Giorgio Albareto (), Michele Cascarano, Stefania De Mitri (), Cristina Demma (), Roberto Felici () and Carlotta Rossi ()
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Giorgio Albareto: Bank of Italy
Stefania De Mitri: Bank of Italy
Cristina Demma: Bank of Italy
Roberto Felici: Bank of Italy
Carlotta Rossi: Bank of Italy

No 684, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper investigates the territorial gap in firms’ access to credit between 2008 and 2019 and describes the functioning of the credit market in the southern regions of Italy. The southern firms are characterized by a higher level of credit risk; all other things being equal, these firms face less favourable credit conditions than others, paying higher interest rates and providing more collateral on loans. Despite this, the dynamics of loans to firms was more marked in the south with respect to the rest of the country, given the support of the southern banks, which increased lending to firms in these regions, especially to small businesses, more than other banks. During the period 2008-2019, the proportion of riskier loans of banks headquartered in the south increased; these banks are characterized by lower quality credit portfolios and lower profitability.

Keywords: firm credit; banking system; credit conditions territorial gaps; Italy’s southern regions (search for similar items in EconPapers)
JEL-codes: G10 G21 G3 L10 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-fdg, nep-sbm and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_684_22

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