Cleaning-up Bank Balance Sheets: Economic, Legal, and Supervisory Measures for Italy

ByJose M Garrido, Emanuel Kopp, Anke Weber

July 11, 2016

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

To stabilize and bring down nonperforming loans (NPLs) in the Italian banking system, the Italian authorities have been implementing a number of reforms, aimed among others at speeding up insolvency and enforcement proceedings, strengthening bank corporate governance, cleaning up balance sheets, and facilitating bank consolidation. This paper examines the Italian banking system’s NPL problem, which ties up capital, weighing on bank profitability and authorities’ economic reforms. It argues for a comprehensive approach, encompassing economic, supervisory, and legal measures. The authorities’ reforms are important steps toward this end. The paper describes measures that could further support their actions.

Subject: Asset and liability management, Banking, Debt restructuring, Distressed assets, Financial institutions, Financial sector policy and analysis, Loans, Nonperforming loans, Solvency

Keywords: asset management companies, asset quality, Banca delle Marche, bank, bank financing, corporate restructuring, Debt restructuring, default probability, Distressed assets, Eastern Europe, econometric methodology, enforcement method, Global, Loans, management experience, Nonperforming loans, NPL problem, NPL ratio, NPL write-off, procedure, securitization transaction, security interest, Solvency, WP

Pages:
33
Volume:
2016
DOI:
https://doi.org/10.5089/9781498357036.001
Issue:
135
Series:
Working Paper No. 2016/135
Stock No:
WPIEA2016135
ISBN:
9781498357036
ISSN:
1018-5941

Loading component...

IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Loading component...

IMF Working Papers