With the aim of contributing to the use of stress testing techniques, by now a commonly-used practice adopted by the financial community to understand the determinants of financial instability, and to measure the size of financial risk, this work represents an application of macro stress testing...

A new approach is proposed for searching multiple unknown breaks, possibly associated with EMU, in the short term business lending rate pass-through. Multiple breaks are detected in five out of nine countries of the euro area. The last break occurs much before the start of EMU for France,...

The solution adopted in Basel II to deal with procyclicality of capital requirements (i.e. through the cycle ratings and long-run average estimates of default probabilities) implies a reduction in the risk-sensitivity that contradicts the original spirit of the new framework.In order to preserve...

A new approach to search for structural breaks in the retail lending rates pass-through in the wake of EMU is proposed and implemented for Italy and Portugal. The econometric exercise shows that breakpoints cluster in the second semester 1999 and that the pass-through on short term lending is,...

Italian firms are top users of trade credit in an international comparison. The paper offers some clues to the determinants of this stylised fact exploiting the answers of about 1900 manufacturing firms on a wide range of contractual features, separately for domestic and foreign counterparties....

The study, aimed at evaluating the likely effects of the EC Directive on late payments, provides direct evidence that interfirm credit received by Italian manufacturing firms is, if ever, only slightly more expensive than bank loans. An econometric exercise shows that financial determinants have...

Aggregate demand models extending IS/LM fixed price framework yield an enhancement mechanism of the traditional monetary transmission mechanism, credit channel, which, according to the credit view, works through the balance sheet channel and the bank lending channel. In this paper I modify the...

This paper contain an empirical analysis on the most relevant determinants of heterogeneity in Italian banks' lending rate and lending behaviour, performed with descriptive statistics and dynamic panel data analysis on the basis of a "mesoeconomic" data set specifically acquired from the Bank of...

In the first detailed study of the trade debt own cost for the Italian manufacturing firms it is shown that, comparing also self-defined bank lending rationed and non rationed firms, interfirm credit received is, if ever, only slightly more expensive than bank credit. Besides establishing the...

Recent empirical studies have shown that the structure of the legal system and the efficiency in law enforcement influence the financial structure of the firms, their ability to gain access to capital markets, and the growth rate of economic systems. This paper uses a simple banking model with...