Businesses seized from organized crime groups: their relations with the banking system
AbstractThis paper analyzes the relations between businesses seized from organized crime and the banking system. The first part of the paper examines legislative developments regarding seized and confiscated assets and highlights the persistence of problem areas despite the efforts to create a systematic framework for measures to combat crime on the economic plane. The analysis of firms’ credit and operational profiles in the second part of the paper finds no evidence that banks, following the confiscation order, impose more onerous terms and conditions with respect to other companies in the same sectors, located in the same geographical areas and having similar operational profiles. This finding appears to be linked to the observation that the deterioration of the main indicators dates back to the years before the confiscation order, presumably in part following preventive action by the banks, prompted as a precaution to reduce their exposure at the first hint of a firm’s involvement in anti-mafia investigations. The paper concludes with implications for policy, taking into consideration the crucial role of expectations, the need to restore firms to healthy conditions through timely planning and the importance of economically efficient operational choices.
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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 202.
Date of creation: Sep 2013
Date of revision:
requisition; organized crime; bank-firm relationships;
Find related papers by JEL classification:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-25 (All new papers)
- NEP-BAN-2013-10-25 (Banking)
- NEP-CFN-2013-10-25 (Corporate Finance)
- NEP-LAW-2013-10-25 (Law & Economics)
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