XXVI Edition

14-15-16 December 2017"

Strengths and weaknesses of banking supervision in Italy: suggestions for the prospective European system

guerello chiara, luiss guido carli
Murè Pina, Università di Roma Sapienza
Rovo Natasha, luiss guido carli
Spallone Marco, Università di Chieti e Pescara G. D'Annunzio

This investigation exploits a newly built database, which merges the balance sheets of a large sample of Italian banks with civil money penalties imposed on the same institutions by the main Italian supervisory authorities (namely Bank of Italy and CONSOB) in the last decade. The scope of the analysis is twofold. First, we evaluate the effects of sanctions on economic performance: we find a negative causality, but only for those banks that are repeatedly sanctioned, for whatever reason, either related or unrelated to economic performance. Second, according to the motivations provided by the current Italian regulatory framework, we identify a set of economic indicators that are, at least in principle, related to sanctions and we assess their actual predictive power: we find that sanctions can be anticipated by looking at indicators related to efficiency, productivity, and both funding and asset management.

Area: Financial Regulation and Supervision

Keywords: Enforcement Actions; Bank Supervision; Bank Performance; Risk Profile; Basel III

Paper file

University Network