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Italy—Assessing Competition and Efficiency in the Banking System

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  • International Monetary Fund

Abstract

The paper assesses the degree of banking competition and efficiency in Italy?over time as well as compared to that in other countries, such as France, Germany, Spain, the United Kingdom, and the United States. The paper finds competition in the Italian banking sector has intensified in loan and deposit markets in recent years, but banks still operate in a highcost, high-income system, particularly with respect to retail/services, and efficiency gains have yet to fully materialize. The degree of competition falls within the range of estimates for a set of comparator countries. Greater contestability should act as a powerful force to drive banks to become more competitive and efficient. Competition policy will also continue to be an important consideration, both in enforcing Italy's antitrust laws and in ensuring that the procedures for dealing with weak banks and other merger and acquisition reviews focus on stability and competition objectives.

Suggested Citation

  • International Monetary Fund, 2007. "Italy—Assessing Competition and Efficiency in the Banking System," IMF Working Papers 07/26, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/26
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    Cited by:

    1. repec:wsi:rpbfmp:v:13:y:2010:i:04:n:s0219091510002050 is not listed on IDEAS
    2. Aiello, Francesco & Bonanno, Graziella, 2016. "Bank efficiency and local market conditions. Evidence from Italy," Journal of Economics and Business, Elsevier, vol. 83(C), pages 70-90.
    3. repec:ebl:ecbull:eb-17-00552 is not listed on IDEAS
    4. Robert M. Stern, 2010. "Trade in Financial ServicesÑHas the IMF Been Involved Constructively?," Working Papers 613, Research Seminar in International Economics, University of Michigan.
    5. Francesco Marchionne & Alberto Zazzaro, 2018. "Risk and competitiveness in the Italian banking sector," Economics Bulletin, AccessEcon, vol. 38(1), pages 271-280.
    6. A. A. Antzoulatos & E. Panopoulou & C. Tsoumas, 2011. "The enigma of noninterest income convergence," Applied Financial Economics, Taylor & Francis Journals, vol. 21(17), pages 1309-1316.
    7. Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2013. "Do banks price discriminate spatially? Evidence from small business lending in local credit markets," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4183-4197.
    8. John Goddard & John O.S. Wilson, 2008. "Measuring Competition in Banking : A Disequilibrium Approach," EIEF Working Papers Series 0808, Einaudi Institute for Economics and Finance (EIEF), revised Apr 2008.

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    Keywords

    Banking systems; Banking; Competition; Italy; efficiency; merger; banking sector; mergers;

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