Medium- and long-term credit in Italy

Abstract

A feature of the Italian credit system today is the separation of short-term from medium- and long-term operations, an arrangement dating from the thirties, following the Great Depression that had led to the crisis of the “mixed banks” then in existence. As a general rule it is the banks which handle the raising and investment of short-term savings, while the work of channelling medium- and long-term funds is entrusted to the so-called special credit institutions. The present article looks at this special credit system in Italy which is made up of three types of credit institutes: industrial and public works, mortgage and building, and agricultural. After outlining some general features of the special credit system, the author considers the technical forms of government intervention and their evolution, the borrowing sectors and the cost of medium- and long-term credit, the burden on the Italian budget of interest-rate subsidies and finally subsidised credits. JEL: E51, G21, H61, H24