Mechanisms must be adopted to prevent a misinterpretation of banks’ relationship with their local area from steering lending and investment activity in the wrong direction, putting the soundness of banks’ balance sheets at risk and hindering the efficient allocation of resources. In addition to disbursing credit, Italian banks often participate directly in firms’ capital.
Such equity links must not be a source of distortions in lending decisions or give rise to attempts to prevent debtors’ difficulties from emerging. These risks, like all others deriving from relationships with counterparties closely linked to banks, must be appropriately monitored by banks’ governing bodies. The supervisory authority cannot intervene preventively with regard to individual transactions, even if they are with related parties.