Household Wealth and Resilience to Financial Shocks in Italy

August 31, 2018

Preview Citation

Format: Chicago

Daniel Garcia-Macia. Household Wealth and Resilience to Financial Shocks in Italy, (USA: International Monetary Fund, 2018) accessed November 5, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

High household wealth is often cited as a key strength of the Italian economy. Both in absolute terms and relative to income, the Italian household sector is wealthier than most euro area peers. A sizable fraction of this wealth is held by the rich and upper middle classes. This paper documents the changes in the Italian household sector’s financial wealth over the past two decades, by constructing the matrix of bilateral financial sectoral exposures. Households became increasingly exposed to the financial sector, which in turn was exposed to the highly indebted real and government sectors. The paper then simulates different financial shocks to gauge the ability of the household sector to absorb losses. Simple illustrative calculations are presented for a fall in the value of government bonds as well as for bank bail-ins versus bailouts.

Subject: Banking, Creditor bail-in, Economic sectors, Financial crises, Financial institutions, Financial sector, Income distribution, National accounts, Sovereign bonds, Stocks

Keywords: Bail-in, Bail-in case, Bailout, Balance sheet analysis, Bond, Creditor bail-in, Equity impact, Financial asset holding, Financial linkages, Financial sector, Flow of funds, Flow-of-funds datum, Global, Government bond, Income distribution, MFI assets, Non-financial corporates, Sectoral financial asset exposure, Sovereign bonds, Stocks, WP

Publication Details

Pages:

26
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2018/196
Stock No:

WPIEA2018196
ISBN:

9781484374894
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers