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

Author/Editor:

Jose M Garrido ; Emanuel Kopp ; Miss Anke Weber

Publication Date:

July 11, 2016

Electronic Access:

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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:

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.

Series:

Working Paper No. 2016/135

Subject:

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

English

Publication Date:

July 11, 2016

ISBN/ISSN:

9781498357036/1018-5941

Stock No:

WPIEA2016135

Pages:

33

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