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The banking system and the financing of southern Italian firms

Author

Listed:
  • Giorgio Albareto

    (Bank of Italy)

  • Michele Cascarano

    (Bank of Italy)

  • Stefania De Mitri

    (Bank of Italy)

  • Cristina Demma

    (Bank of Italy)

  • Roberto Felici

    (Bank of Italy)

  • Carlotta Rossi

    (Bank of Italy)

Abstract

This paper investigates the territorial gap in firms’ access to credit between 2008 and 2019 and describes the functioning of the credit market in the southern regions of Italy. The southern firms are characterized by a higher level of credit risk; all other things being equal, these firms face less favourable credit conditions than others, paying higher interest rates and providing more collateral on loans. Despite this, the dynamics of loans to firms was more marked in the south with respect to the rest of the country, given the support of the southern banks, which increased lending to firms in these regions, especially to small businesses, more than other banks. During the period 2008-2019, the proportion of riskier loans of banks headquartered in the south increased; these banks are characterized by lower quality credit portfolios and lower profitability.

Suggested Citation

  • Giorgio Albareto & Michele Cascarano & Stefania De Mitri & Cristina Demma & Roberto Felici & Carlotta Rossi, 2022. "The banking system and the financing of southern Italian firms," Questioni di Economia e Finanza (Occasional Papers) 684, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_684_22
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2022-0684/QEF_684_22.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    firm credit; banking system; credit conditions territorial gaps; Italy’s southern regions;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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