Véron, Nicolas, (2017), “ECB finally addressing Italian bank woes”, Bruegel, 4 Ιανουαρίου
Most of Italy’s banks, many of which are small and local, have politicized governance features that blur commercial incentives. As a consequence, they were unable to rein in their lending during the downturn of the late 2000s.
Many of these loans turned sour in subsequent years and local connections prevented the banks from working them out, so they kept supporting borrowers in a pattern of “pretend and extend.” The system’s non-performing exposures now total hundreds of billions of euros. Many of these loans are collateralized, but repossession is not really an option given the country’s antiquated judicial system.
Σχετικές Αναρτήσεις
- Gros, Daniel, Pieter de Groen, Willem, (2016), “A radical cure for Italy’s banking problems: A combination of good banks and soft bail-in”, CEPS, 20 Δεκεμβρίου
- Reinhart, Carmen, (2016), “Fleeing from Italy”, Project Syndicate, 23 Νοεμβρίου