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Italian banks and market-based corporate financing

Author

Listed:
  • Giorgio Albareto

    () (Banca d’Italia)

  • Giuseppe Marinelli

    () (Banca d’Italia)

Abstract

The recent financial crisis has induced firms to turn increasingly to financing sources other than bank credit, and banks to boost their income from non-lending services. This paper provides some evidence concerning possibility and convenience for Italian banks to expand the supply of financial services to firms by examining the placement market for Italian corporate securities and its relationship with the credit market in the period 2000-2016. The paper shows that when firms entered the stock and bond markets, bank credit was partially crowded-out and interest rates dropped for both first-time issuers and risky firms. However, when banks also played a major role both in placing corporate issues and in financing the issuers, lending relationships did not weaken.

Suggested Citation

  • Giorgio Albareto & Giuseppe Marinelli, 2018. "Italian banks and market-based corporate financing," Questioni di Economia e Finanza (Occasional Papers) 432, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_432_18
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/qef/2018-0432/QEF_432_18.pdf
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    References listed on IDEAS

    as
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    1. repec:psl:moneta:2018:21 is not listed on IDEAS

    More about this item

    Keywords

    stock and bond issues; securities placement; banks’ profitability; corporate financing;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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