The Privatization of Italian Savings Banks: A Role Model for Germany?
Elena Carletti (Center for Financial Studies, Frankfurt), Hendrik Hakenes (University of Hannover) and Isabel Schnabel (University of Mainz, CEPR and MPI Bonn):
Publication in DIW Quarterly Journal of Economic Research (Vierteljahrshefte für Wirtschaftsforschung), 74(4), 2005, 32-50
Abstract
The privatization of the Italian savings banks is often described as a success story. Proponents
of privatization argue that a similar reform could cure the current problems in the German
banking sector. In this paper, we ask whether the Italian experience can really serve as a role model
for Germany. Our analysis confirms that the Italian reforms of the 1990s were a success. Banks’ profitability increased, without impairing competition or the availability of banking services and loans.
However, this success has to be attributed to a broad set of reforms, which went far beyond the privatization of savings banks. Moreover, Italy had a different starting point before the reforms, and the structure of the public banking sector differed markedly from Germany’s. Therefore, one may question the transferability of the Italian experience to Germany. The costs and benefits of privatization should be weighed carefully against each other before abandoning the three-pillar system.
University of Mainz Publication
of privatization argue that a similar reform could cure the current problems in the German
banking sector. In this paper, we ask whether the Italian experience can really serve as a role model
for Germany. Our analysis confirms that the Italian reforms of the 1990s were a success. Banks’ profitability increased, without impairing competition or the availability of banking services and loans.
However, this success has to be attributed to a broad set of reforms, which went far beyond the privatization of savings banks. Moreover, Italy had a different starting point before the reforms, and the structure of the public banking sector differed markedly from Germany’s. Therefore, one may question the transferability of the Italian experience to Germany. The costs and benefits of privatization should be weighed carefully against each other before abandoning the three-pillar system.
University of Mainz Publication
14.04.2010 | Fachartikel