The role of bank supply in the Italian credit market: evidence from a new regional survey

Andrea Orame ()
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Andrea Orame: Bank of Italy

No 1279, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The work analyses the characteristics of supply in the Italian credit market with a focus on the years 2009-2014. By using a new survey, I find that approximately 40 percent of the decline in business lending originates in the tightening of bank credit standards, with a significant decrease in supply after the first semester of 2011. The data also reveal a substantial supply-side heterogeneity: illiquid, profitable, efficient and group-member banks reduce their supply further, as do banks with a low dependence on interest income. Banks in larger groups also display a different supply pattern, with greater tightenings and easings. Capital and funding seem to play no significant role.

Keywords: financial crisis; supply of credit; bank lending; bank fragility; universal banking; capital; regulation; governance (search for similar items in EconPapers)
JEL-codes: E32 E51 G01 G21 G28 G32 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-ban and nep-mac
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