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The Reform of Italian Cooperative Banks; Discussion of Proposals

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  • Eva Gutierrez

Abstract

This paper argues that the governance framework of cooperative banks may hamper raising capital, particularly at time of distress, complicating the bank resolution process ?specially for large banks?and may not provide adequate incentives to control banks' management. Reforms should preserve the positive characteristics that make cooperative banks a valuable addition to the Italian financial system, while providing enough flexibility and incentives for banks to adopt a suitable governance model. Our empirical analysis suggests that cooperative banks may enjoy a higher degree of monopoly power than commercial banks. Thus, regulations and the enforcement of antitrust policies should ensure a leveled playing field.

Suggested Citation

  • Eva Gutierrez, 2008. "The Reform of Italian Cooperative Banks; Discussion of Proposals," IMF Working Papers 08/74, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/74
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    References listed on IDEAS

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    1. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-456, June.
    2. Altunbas, Yener & Evans, Lynne & Molyneux, Philip, 2001. "Bank Ownership and Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(4), pages 926-954, November.
    3. Hempell, Hannah S., 2002. "Testing for Competition Among German Banks," Discussion Paper Series 1: Economic Studies 2002,04, Deutsche Bundesbank.
    4. Martin Cihak & Heiko Hesse, 2007. "Cooperative Banks and Financial Stability," IMF Working Papers 07/2, International Monetary Fund.
    5. Kenneth Spong & Richard J. Sullivan & Robert DeYoung, 1995. "What makes a bank efficient? : a look at financial characteristics and management and ownership structure," Financial Industry Perspectives, Federal Reserve Bank of Kansas City, issue Dec, pages 1-19.
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    Cited by:

    1. Ferri, Giovanni & Kalmi, Panu & Kerola, Eeva, 2014. "Does bank ownership affect lending behavior? Evidence from the Euro area," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 194-209.

    More about this item

    Keywords

    Competition; Capital accumulation; Bank supervision; Italy; Bank resolution; Governance; Cooperative Banks; banking; shareholders; banking law; credit; shares;

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