It can be argued that the Italian banking system is small, because the entire
financial system is less advanced than in other countries of the Eurozone. In proportion
to GDP, capitalization of the Italian stock market was low and in 2015 amounted to
28%, compared with 51% in Germany, 65% in Spain and 86% in France [4]. The
underdevelopment of financial markets is due to the desire of numerous family-
controlled firms to keep third-party shareholders away, as well as to a legal system that
is accused of inability to protect minority shareholders and small investors.
By the end of 2016, the Italian banking sector has 575 banks and 29,000
branches, 70% of which are limited liability companies (SpA). The sector also includes
two types of institutions operating within a joint structure, namely, 15% of the mutual
banks ("Banche di credito cooperativo" – BCCs) and 14% of cooperative banks
("Banche popolari – BPs"). Branches of foreign banks in Italy account for 1% of the
total number of branches.
The ownership of the Italian banks is private. The transition from state
ownership to limited liability companies in the 1990s was the most important change
in the credit system of the country since the Great Depression. Italy stopped the
existence of state-owned banks, de facto, unlike Germany and Spain, where the bank's
state capital reserves remain a distinctive feature of the national economy, or countries
such as Great Britain and Ireland, where financial instability, caused by the crisis of
2008, has led to nationalization of a large part of the credit system.
All Italian banks, with the exception of mutual banks that aret specially
regulated, operate as private individuals for profit. Even BPs, characterized by the
principle of "one person, one voice," operate on the market in the same way as SpA:
some are listed on the stock market and some are the leading players in the Italian
banking market.
By contrast, mutual banks are very small (13 branches per bank on average) and
serve only local clients (artisans, farmers, retailers, small businesses in general, and
households). BCCs differ from other banks primarily because their main tasks are the
welfare of shareholders and the development of the local economy. BCCs have their
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