The Reform of Italian Cooperative Banks: Discussion of Proposals

 
Author/Editor: Gutierrez, Eva
 
Publication Date: March 01, 2008
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper argues that the governance framework of cooperative banks may hamper raising capital, particularly at time of distress, complicating the bank resolution process ?specially for large banks?and may not provide adequate incentives to control banks' management. Reforms should preserve the positive characteristics that make cooperative banks a valuable addition to the Italian financial system, while providing enough flexibility and incentives for banks to adopt a suitable governance model. Our empirical analysis suggests that cooperative banks may enjoy a higher degree of monopoly power than commercial banks. Thus, regulations and the enforcement of antitrust policies should ensure a leveled playing field.
 
Series: Working Paper No. 08/74
Subject(s): Bank resolution | Italy | Bank supervision | Governance | Capital accumulation

Author's Keyword(s): Cooperative Banks | bank resolution | competition.
 
English
Publication Date: March 01, 2008
Format: Paper
Stock No: WPIEA2008074 Pages: 18
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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