Between the start of 2007 and the start of 2020, the ratio of the highest-quality capital to risk-weighted assets almost doubled, reaching 14.0 per cent. In March 2020, the mean liquidity coverage ratio stood at 174 per cent of the regulatory requirement; it has increased further in the meantime. (No liquidity requirement existed in 2007).
Furthermore, the weaknesses on Italian banks’ balance sheets caused by the sovereign debt crisis have largely been reabsorbed: in March, the net non-performing loan ratio had dropped by two thirds from its 2015 peak, i.e. from 9.8 to 3.2 per cent.