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Interconnectedness in the Italian financial sector: banks, investment funds and insurance companies

Author

Listed:
  • Valentina Michelangeli

    (Bank of Italy)

  • Silvia Sacco

    (IVASS)

  • Valentino Bado

    (Bank of Italy)

  • Valeria De Chiara

    (Bank of Italy)

  • Ginette Eramo

    (Bank of Italy)

  • Francesco Ficarola

    (IVASS)

  • Irene Mavilia

    (Bank of Italy)

  • Claudia Miani

    (Bank of Italy)

  • Ivan Quaglia

    (Bank of Italy)

  • Giuseppe Reale

    (Bank of Italy)

  • Francesco Sciarretta

    (IVASS)

  • Riccardo Scimone

    (Bank of Italy)

  • Laura Sigalotti

    (Bank of Italy)

Abstract

This paper examines interconnectedness across banks, investment funds, insurance companies and the real economy in Italy between 2019 and 2025. Using a unique and comprehensive granular dataset that maps loans and securities exposures across sectors, we document the main characteristics and evolution of financial linkages. Banks have limited direct exposures to investment funds and insurers and are closely connected to households and non-financial corporations (NFCs) through loans. Insurers hold the largest securities portfolios and are the main investors in fund shares. Investment funds hold significant portfolio shares in securities issued by NFCs, and to a lesser extent by banks and other funds. Not surprisingly, our analysis of overlapping portfolios shows that bond holdings-especially Italian government securities-constitute the largest common exposure. We also evaluate intragroup links, finding that they decrease the extent of interconnectedness, especially when it comes to banking groups. Overall, our results highlight the key channels through which shocks can propagate across institutions and provide insights for enhancing risk monitoring.

Suggested Citation

  • Valentina Michelangeli & Silvia Sacco & Valentino Bado & Valeria De Chiara & Ginette Eramo & Francesco Ficarola & Irene Mavilia & Claudia Miani & Ivan Quaglia & Giuseppe Reale & Francesco Sciarretta &, 2026. "Interconnectedness in the Italian financial sector: banks, investment funds and insurance companies," Questioni di Economia e Finanza (Occasional Papers) 1050, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_1050_26
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2026-1050/QEF_1050_26.pdf
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    References listed on IDEAS

    as
    1. Poledna, Sebastian & Martínez-Jaramillo, Serafín & Caccioli, Fabio & Thurner, Stefan, 2021. "Quantification of systemic risk from overlapping portfolios in the financial system," Journal of Financial Stability, Elsevier, vol. 52(C).
    2. Del Vecchio, Leonardo & Giglio, Carla & Shaw, Frances & Spanò, Guido & Cappelletti, Giuseppe, 2022. "A sensitivities based CoVaR approach to assets commonality and its application to SSM banks," Working Paper Series 2725, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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