A valuation of the resilience of the Italian mutual guarantee system facing the financial crisis

The mutual guarantee system - composed of the so called confidi - is one ofthe most important peculiarities of the Italian financial system. In other Europeanand non-European countries similar institutions operate in smoothing SME's accessto credit, but the phenomenon is much more capillary in Italy.In times of financial crisis all instruments and mechanisms aimed reducing creditcrunch have particular importance and tend to be used as a channel for public interventionwith the goal of sustaining economic growth. The long financial turbulencestarted in 2007 is not an exception under this point of view. Confidi's activity hasbeen growing substantially as a consequence of a strong demand of guarantees comingfrom the SMEs and thanks to a massive inflow of public resources.In this paper we evaluate the impact of the current financial crisis of the «confidisystem», looking at the level of activity, the inflow and distribution of public resources,the financial, economic and managerial equilibriums of the guarantee institutions.The analysis is focused on the prudentially supervised confidi (ex Art. 107T.U.B.) and on a sample of the larger unsupervised confidi (ex Art. 106 T.UB.), duringthe period 2009-2010. The group of confidi we examine represents numericallya small fraction of the mutual guarantee universe, but covers roughly 90% of theguarantees' stock at the end of 2009. In other words, it is the pulsing hearth of thesystem. Around this heart numerous smaller entities operate, but they are often characterized by such a minimal level of activity that their survival prospects in the mediumterm are in serious doubt.