Another factor of no small importance was their objective of taking advantage of the administrative constraints then burdening the operations of Italian banks. In particular, foreign intermediaries could exploit their parent banks’ foreign currency funding, which they used to make foreign currency loans to both non-bank customers and Italian banks, and the possibility of raising funds at moderate costs on the interbank market.
Foreign banks accounted for about 4 per cent of total assets, with a higher market share for loans to non-bank customers and for commitments and contingent liabilities. The profit margins they achieved on both loans and investments were substantial, especially compared with those obtaining in their home countries.