The sovereign debt crisis: the impact on the intermediation model of Italian banks

Stefano Cosma (stefano.cosma@unimore.it) and Elisabetta Gualandri (elisabetta.gualandri@unimore.it)

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

Abstract: The aim of the contribute is to analyze the impact of the financial crisis, in particular since the start of the sovereign debt phase, on Italian banks and their intermediation model. Italian banks’ specific business model explains why they suffered less than those of other countries during the first phase of the crisis, requiring one of the lowest levels of public facilities in the EC as compared to GDP. Most of these same characteristics have changed from positive to negative factors since the sovereign debt crisis, which hit Italy hard, affecting first banks’ liquidity and secondly the cost and volumes of funding and loans. Italian banks are now facing the effects of the double-dip recession, which has significantly weakened businesses and households, their key customer segments, and their borrowing and saving capability, with an increasing rate of non-performing loans. This situation is impairing the sustainability of the “traditional” intermediation model and means that banks must introduce strategies for significantly modifying the banking business model they adopt.

Keywords: Italian banks; sovereign debt crisis; economic recession; intermediation model; credit crunch (search for similar items in EconPapers)
JEL-codes: G01 G15 G18 G21 G28 L50 (search for similar items in EconPapers)
Pages: pages 30
Date: 2013-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:mod:wcefin:0042

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