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Purchases of sovereign debt securities by Italian banks during the crisis: the role of balance-sheet conditions

Author

Listed:
  • Massimiliano Affinito

    () (Bank of Italy)

  • Giorgio Albareto

    () (Bank of Italy)

  • Raffaele Santioni

    () (Bank of Italy)

Abstract

This paper analyses the main microeconomic determinants of Italian banks’ purchases of sovereign debt securities from 2007 to 2013, with special reference to their balance-sheet conditions. The analysis distinguishes two phases of the crisis – the period following the Lehman Brothers collapse and the sovereign debt crisis – and different types of banks (large and small). Results show that banks’ specific characteristics and balance-sheet features do matter and that banks use government securities purchases to support their financial and economic conditions. The influence of the balance-sheet conditions differs according to the phase of the crisis and the type of bank.

Suggested Citation

  • Massimiliano Affinito & Giorgio Albareto & Raffaele Santioni, 2016. "Purchases of sovereign debt securities by Italian banks during the crisis: the role of balance-sheet conditions," Questioni di Economia e Finanza (Occasional Papers) 330, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_330_16
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    File URL: http://www.bancaditalia.it/pubblicazioni/qef/2016-0330/QEF_330_16.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Silvana Bartoletto & Bruno Chiarini & Elisabetta Marzano & Paolo Piselli, 2018. "Banking Crises and Boom-Bust Dynamics: Evidence for Italy (1861-2016)," CESifo Working Paper Series 6972, CESifo Group Munich.
    2. Gros, Daniel, 2017. "Banks as buyers of last resort for government bonds?," CEPS Papers 13226, Centre for European Policy Studies.

    More about this item

    Keywords

    financial crisis; securities portfolio; banks’ balance sheets; sovereign risk;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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