Italian nonfinancial firms and derivatives
AbstractThis paper studies the characteristics of the Italian nonfinancial firms using derivatives and the purpose of the derivatives use according to the most important literature in financial risk management. By using the Italian credit register and balance sheet data this study extends for the first time the derivatives analysis to small and medium firms. The paper finds that derivatives are used frequently among nonfinancial firms. Firms using derivatives are the most exposed to financial risks and have different economic and financial characteristics with respect to non-using ones. By examining some financial risk indicators the analysis finds a relation between high derivative exposure and financial distress. In the use of derivatives bank-firm relationship is more concentrated than in the loan relationship.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 139.
Date of creation: Oct 2012
Date of revision:
derivatives; banks; risk management;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-06 (All new papers)
- NEP-BAN-2012-12-06 (Banking)
- NEP-RMG-2012-12-06 (Risk Management)
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