Second, as the captive investor base was viewed as constraining the development of the market, the statutory prescription for banks’ investments in government and other approved securities was scaled down from the peak level in February 1992 to the statutory minimum level of 25 per cent by April 1997. As a result, the focus shifted towards the widening of the investor base.
In the case of bankruptcy proceedings the duration ranges from 4.8 years in Trento to 15.4 years in Messina. Improving the efficiency of the courts where proceedings take longer than average would be of considerable help in reducing the stock of NPLs. Large fire sales of NPLs can only be a solution when the bank’s stability is at risk.