Interconnectedness in the Italian financial sector: banks, investment funds and insurance companies

Valentina Michelangeli (), Silvia Sacco (), Valentino Bado (), Valeria De Chiara (), Ginette Eramo (), Francesco Ficarola (), Irene Mavilia (), Claudia Miani (), Ivan Quaglia (), Giuseppe Reale (), Francesco Sciarretta (), Riccardo Scimone () and Laura Sigalotti ()
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Valentina Michelangeli: Bank of Italy
Silvia Sacco: IVASS
Valentino Bado: Bank of Italy
Valeria De Chiara: Bank of Italy
Ginette Eramo: Bank of Italy
Francesco Ficarola: IVASS
Irene Mavilia: Bank of Italy
Claudia Miani: Bank of Italy
Ivan Quaglia: Bank of Italy
Giuseppe Reale: Bank of Italy
Francesco Sciarretta: IVASS
Riccardo Scimone: Bank of Italy
Laura Sigalotti: Bank of Italy

No 1050, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper examines interconnectedness across banks, investment funds, insurance companies and the real economy in Italy between 2019 and 2025. Using a unique and comprehensive granular dataset that maps loans and securities exposures across sectors, we document the main characteristics and evolution of financial linkages. Banks have limited direct exposures to investment funds and insurers and are closely connected to households and non-financial corporations (NFCs) through loans. Insurers hold the largest securities portfolios and are the main investors in fund shares. Investment funds hold significant portfolio shares in securities issued by NFCs, and to a lesser extent by banks and other funds. Not surprisingly, our analysis of overlapping portfolios shows that bond holdings-especially Italian government securities-constitute the largest common exposure. We also evaluate intragroup links, finding that they decrease the extent of interconnectedness, especially when it comes to banking groups. Overall, our results highlight the key channels through which shocks can propagate across institutions and provide insights for enhancing risk monitoring.

Keywords: banks; insurers; investment funds; interconnections; non-bank financial institutions (search for similar items in EconPapers)
JEL-codes: G18 G21 G22 G23 (search for similar items in EconPapers)
Date: 2026-07
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_1050_26

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