CRR II and IFR: Are changes noticeable for Italian banks and investment firms? Some evidence from supervisory reporting data

This paper analyses the impact on Italian banks and investment firms of some regulatory changes introduced by the CRR II and the IFR. The implementation of the new rules was reflected in a parallel massive overhaul of the Bank of Italy's supervisory reporting framework. This new data has been exploited in the paper, with regard to the period December 2019-June 2022, in order to assess, through a descriptive analysis, any major changes in reporting patterns due to the enforcement of the new rules. With reference to the banking sector, first we examine the partially revised credit risk measures (the 'supporting factors' for Small and Medium-sized Enterprises (SMEs) and for infrastructure projects) and the specific treatment of certain loans backed by pensions or salaries (in Italy 'Cessione del Quinto dello Stipendio' – CQS); second, we analyse the leverage ratio and the net stable funding ratio (NSFR). Regarding investment firms (IFs), we explore the impact of the new regulatory framework. Our empirical findings highlight a reduction in terms of capital requirements for both banks and IFs, although limited to specific services, and show that banks were largely compliant with the new NSFR and leverage requirements before the actual enforcement of the new prudential rules.