The Reform of Italian Cooperative Banks: Discussion of Proposals

March 1, 2008

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Eva Gutierrez. The Reform of Italian Cooperative Banks: Discussion of Proposals, (USA: International Monetary Fund, 2008) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper argues that the governance framework of cooperative banks may hamper raising capital, particularly at time of distress, complicating the bank resolution process ?specially for large banks?and may not provide adequate incentives to control banks' management. Reforms should preserve the positive characteristics that make cooperative banks a valuable addition to the Italian financial system, while providing enough flexibility and incentives for banks to adopt a suitable governance model. Our empirical analysis suggests that cooperative banks may enjoy a higher degree of monopoly power than commercial banks. Thus, regulations and the enforcement of antitrust policies should ensure a leveled playing field.

Subject: Bank legislation, Banking, Capital adequacy requirements, Commercial banks, Competition, Cooperative banks, Financial institutions, Financial markets, Financial regulation and supervision, Legal support in revenue administration

Keywords: Banche di Credito Cooperativo, Bank, Bank legislation, Bank management, Banks' management, Capital adequacy requirements, Commercial banks, Competition, Cooperative bank, Cooperative banks, Europe, Form market, Governance framework, Governance reform proposal, Performance indicator, Shareholder, Structure limits shareholder, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/074
Stock No:

WPIEA2008074
ISBN:

9781451869361
ISSN:

1018-5941

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