Cleaning-up Bank Balance Sheets: Economic, Legal, and Supervisory Measures for Italy
IMF Working Papers, July 11, 2016
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- Cleaning-up Bank Balance Sheets: Economic, Legal, and Supervisory Measures for Italy
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Bibliographic details
- Authors: Jose M Garrido, Emanuel Kopp, Anke Weber
- Published: July 11, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498357036.001
Overview and Purpose
- Authors: Jose M Garrido, Emanuel Kopp, Anke Weber
- Publication date: July 11, 2016
- Series: IMF Working Papers, Working Paper No. 2016/135
- Pages: 33
- DOI: https://doi.org/10.5089/9781498357036.001
- Stock No: WPIEA2016135
- ISBN: 9781498357036
- ISSN: 1018-5941
- Core objective: Examine the Italian banking system’s nonperforming loans (NPLs) problem and argue for a comprehensive approach—economic, supervisory, and legal measures—to stabilize and reduce NPLs.
Key findings about the Italian NPL problem
- NPLs tie up capital and weigh on bank profitability and authorities’ economic reforms.
- The paper characterizes the NPL problem as systemic within the Italian banking system and implicates impediments in insolvency and enforcement proceedings, weaknesses in bank corporate governance, and constraints on balance sheet cleaning and bank consolidation.
Reforms implemented by Italian authorities (as described)
- Reforms aimed at:
- Speeding up insolvency and enforcement proceedings.
- Strengthening bank corporate governance.
- Cleaning up bank balance sheets.
- Facilitating bank consolidation.
- The paper views the authorities’ reforms as important steps toward stabilizing and bringing down NPLs.
Recommended comprehensive approach
- The paper argues for combining:
- Economic measures.
- Supervisory measures.
- Legal measures.
- It describes additional measures that could further support the authorities’ actions (details in the full paper).
Subject classification and keywords
- Subject areas: Asset and liability management, Banking, Debt restructuring, Distressed assets, Financial institutions, Financial sector policy and analysis, Loans, Nonperforming loans, Solvency
- Keywords include: asset management companies, asset quality, Banca delle Marche, bank, bank financing, corporate restructuring, Debt restructuring, default probability, Distressed assets, enforcement method, Loans, management experience, Nonperforming loans, NPL problem, NPL ratio, NPL write-off, securitization transaction, security interest, Solvency, WP
Summary derived from the IMF Working Paper "Cleaning-up Bank Balance Sheets: Economic, Legal, and Supervisory Measures for Italy" (Working Paper No. 2016/135, July 11, 2016).