Usury in Banks: The Risks of Applying the Law in a Misleading and Paradoxical Way

Giovanni Petrella and Andrea Resti

Banca Impresa Società, 2017, issue 1, 123-140

Abstract: In this note we deal with the process of verifying whether a lending rate exceeds the threshold rate set by the Italian anti-usury law, with a special focus on some methodological issues. Since some years, such a verification has been increasingly carried out on the basis of a formula for the lending rate that differs from the one dictated by the Bank of Italy. We show that such an approach - where the lending rate and the threshold rate are computed on the basis of two different procedures - proves unreliable as it is affected by significant mistakes and may lead to paradoxical results.

Keywords: Usury; Lending Rates; Banks. (search for similar items in EconPapers)
Date: 2017
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