Main Features of the Italian Financial System

During the last few years, the main countries’ financial systems have undergone profound changes in terms of both the structural characteristics of the systems themselves and the financial behaviours of operators. Common trends linked to the development of financial markets, the growing role of institutional investors, the consolidation of banking systems, and the formation of large banking conglomerates have emerged; however there are still differences among financial systems, which can lead to variations in the magnitude of the consequences of the financial crisis. Therefore, at the European level, discussion of the convergence of banking models must be accompanied by an attempt to identify the distinctive features of the “ideal” financial system. The crisis has revealed that the banking sector of a country can be considered sound and thus an aid to economic growth and prosperity if it is founded on a number of key principles (Vaciago and Zadra 2009): 1. It must focus above all on financing the economy and the private sector. 2. It must be supported by a high level of retail funding. 3. It must be supported by a solid assets structure. 4. Banking services must be provided through distribution channels (i.e. branches) that ensure good geographical coverage and accessibility to the clientele.