EconPapers    
Economics at your fingertips  
 

Vulnerabilita' del sistema bancario italiano. Diagnosi e rimedi (Dealing with the vulnerability of the Italian banking system)

Elisabetta Montanaro () and Mario Tonveronachi ()
Additional contact information
Elisabetta Montanaro: University of Siena

Moneta e Credito, 2017, vol. 70, issue 280, 299-368

Abstract: The major vulnerabilities of the Italian banking system are the overhang of NPLs and low profitability. Differently from the attention given to excesses of NPLs, the profitability problem is normally considered to be a matter to be left to bank management and not an area of explicit direct regulatory action. Although focusing on capital requirements, regulators and supervisors seldom pose the question of where capital comes from. Using a large sample of 410 Italian domestic banking groups and individual banks, we propose an NPL stress test and a viability test that show: that the system's vulnerability is a widespread phenomenon; that a further recapitalisation of around ten billion euro is necessary; and that, more importantly, limiting interventions to the overhang problem does not put the majority of Italian banks into a viability path due to the inefficiencies coming from their current business models. The analysis of the Italian case strengthens the critique of current regulation and supervision because, not focusing on bank profitability, they do not avoid threats on solvency coming from the accumulation of NPLs. We thus argue that the structural changes necessary to put the Italian banking system into a viable path require new regulatory and supervisory approaches.

Keywords: Banks; NPLs; viability; regulation; supervision; Italy (search for similar items in EconPapers)
JEL-codes: G01 G20 G28 G32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://ojs.uniroma1.it/index.php/monetaecredito/article/view/14163/13895 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:psl:moneta:2017:42

Ordering information: This journal article can be ordered from
http://www.monetaecredito.info

Access Statistics for this article

Moneta e Credito is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti

More articles in Moneta e Credito from Economia civile
Series data maintained by Carlo D'Ippoliti ().

 
Page updated 2018-01-27
Handle: RePEc:psl:moneta:2017:42