Conditions for Smaller Banks This audience knows better than most that smaller banks entered the pandemic in strong 3/4  BIS central bankers' speeches  condition. At the end of 2019, over 95 percent of community and regional banks supervised by the Fed were rated a 1 or 2 under the CAMELS rating system.
The Italian rules have a procyclical effect: if bad debts increase, the costs to the financial system are aggravated, because the volume of non-deductible losses increases. They are particularly onerous in the present phase of the cycle.