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Bad loan closure times in Italy

Author

Listed:
  • Emilia Bonaccorsi di Patti

    (Bank of Italy)

  • Cristina Demma

    (Bank of Italy)

  • Davide Dottori

    (Bank of Italy)

  • Giacinto Micucci

    (Bank of Italy)

Abstract

We propose a procedure for calculating closure times for bad business loans in Italy using Central Credit Register data over the period 2005-2016. We find that after 2008 bad loan closure times increased, peaking in the years 2011-12; they then began to fall, returning close to their initial levels in 2016. These results suggest that the recent initiatives improving banks’ non-performing loan management policies and the effectiveness and speed of recovery procedures are starting to bear fruit.

Suggested Citation

  • Emilia Bonaccorsi di Patti & Cristina Demma & Davide Dottori & Giacinto Micucci, 2019. "Bad loan closure times in Italy," Questioni di Economia e Finanza (Occasional Papers) 532, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_532_19
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2019-0532/QEF_532_19.pdf
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    References listed on IDEAS

    as
    1. Silvia Giacomelli & Sauro Mocetti & Giuliana Palumbo & Giacomo Roma, 2017. "Civil justice in Italy: recent trends," Questioni di Economia e Finanza (Occasional Papers) 401, Bank of Italy, Economic Research and International Relations Area.
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    3. Juri Marcucci & Paolo Emilio Mistrulli, 2013. "Female entrepreneurs in trouble: do their bad loans last longer?," Questioni di Economia e Finanza (Occasional Papers) 185, Bank of Italy, Economic Research and International Relations Area.
    4. Bolton, Patrick & Scharfstein, David S, 1996. "Optimal Debt Structure and the Number of Creditors," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 1-25, February.
    5. Silvia Giacomelli & Tommaso Orlando & Giacomo Rodano, 2018. "Real estate foreclosures: their functioning and the effects of recent reforms," Questioni di Economia e Finanza (Occasional Papers) 448, Bank of Italy, Economic Research and International Relations Area.
    6. Luisa Carpinelli & Giuseppe Cascarino & Silvia Giacomelli & Valerio Vacca, 2017. "The Management of Non-Performing Loans: A Survey among the Main Italian Banks," Politica economica, Società editrice il Mulino, issue 2, pages 157-188.
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    More about this item

    Keywords

    non-performing loans; closure times; firms’ credit; banks.;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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