Compared with the third quarter of 2007 gross domestic product has fallen by almost 9 per cent and industrial production by roughly one fourth. It should surprise no one that banks are encountering difficulties and struggling to support the economy fully. They suffered as a result of the sovereign debt crisis and the ensuing deterioration of funding conditions in international markets.
The protracted recession continues to have repercussions on the quality of loans, above all to firms. In some instances difficulties have arisen from transactions that are incompatible with sound and prudent management, at times even fraudulent. The supervisory action of the Bank of Italy has been intense; when necessary, special administrative measures have been imposed.