Other conditions being equal, an increase of 100 basis points in the yield spread between ten-year Italian and German government bonds tends to be reflected in an increase of about 50 basis points in the average rates on loans to firms in Italy after one quarter and fully after a year.
In September, the banks’ total funding, excluding Eurosystem refinancing, was down by 2.6 per cent from twelve months earlier. The difficulty of raising funds, particularly acute between the summer of 2011 and last spring, has regarded foreign deposits – almost entirely interbank deposits – and bond issues on international wholesale markets.