Credit development, quality deterioration and intermediation model: does bank size matter? Evidence from Italy during the 2007-2010 financial crisis.

This paper, based on financial statements data from about 500 Italian banks in the period between 2006 and 2010, analyses the loans to customers development in Italy by bank size. The research focuses on its evolution over time, on the loan portfolio composition by product breakdown, on the quality of credit exposures and on the main income effects. The aim is to assess the lending policies adopted by Italian banks during the recent financial crisis, by linking the resulting differences also to the bank size and to the characteristics of the intermediation model adopted. The analysis shows that to the heterogeneity emerged in the loans to customers development, in the deterioration of its quality and in the main income effects correspond significant differences in the business model in terms of orientation to the funding-lending credit intermediation activity with customers.