The Bank of Italy is participating in these purchases in proportion to its share of the ECB’s capital. Following the reduction in the Eurosystem’s official rates, the interest rates on bank loans to Italian households and firms have fallen to the average level for the area, except for consumer credit rates, which remain higher.
The increase in credit risk has translated into a widening of the gap in the cost of credit between small and large firms, with an adverse impact on those that currently have the greatest need for bank financing. The recession is also affecting credit quality.