At the same time, its introduction could substantially raise bank funding costs and reduce bank lending. While estimates of these costs are highly uncertain, there are risks of a non-negligible impact on GDP growth.
Banca d’Italia has stressed the need to alleviate the adverse effects of the rules on banks’ loss-absorbing liabilities by ensuring that the amount and quality of funds are proportionate to the actual demands of the resolution, and that the transition period is long enough to allow the banks to build up the requirement gradually.