The deterioration of the cyclical situation could create serious problems for the banks more geared to typical credit intermediation, particularly for some small and medium-sized ones that are already finding it difficult to keep costs down and are struggling to benefit from economies of scale, to diversify their revenue sources and to raise the capital needed to invest in new technologies.
The Bank of Italy’s supervisory action remains focused on encouraging these intermediaries to adopt a corporate governance able to define and implement business plans that are credible and consistent with the challenges posed by the market situation; it is up to the management bodies to act without delay, including on the front of possible mergers, to minimize the risk that situations of difficulty turn into irreversible crises.