The new system for reporting bad loans introduced by the Bank of Italy is a step in the right direction. There is ample scope for improvement in the quality of the data reported. In many cases the information on the status of recovery procedures and the nature of the collateral is incomplete. Approaches differ as regards ongoing procedures; not all banks act promptly.
More effort is needed to reduce the backlog and exploit the new database to the full. The information must become part of the dossier provided to senior management so that strategies can be developed to maximize recovery rates. Another important issue concerns the length of judicial proceedings.