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Italian Banking & Financial Markets

Italy's banking system is made up of an extensive network of large, mid-size, and local banks, catering to the needs of individual depositors and investors, as well as to the diverse banking requirements of Italian businesses.

Banks are subject to prudential supervision by Banca d'Italia, the Italian Central Bank, aimed at safeguarding the system's financial stability and promoting its efficiency.

In the nineties the banking system experienced a massive privatization of previous state owned banks, which led to a process of concentration in the industry.
As of December 31, 2000, in Italy there were 841 banks of which 217 were controlled by 74 bank holding companies, 58 were foreign owned and 499 were local banks. Banks based in Italy distribute their products and services through a network of 28,177 branches in Italy and 94 abroad.

In addition to banks, financial services are offered by registered management companies (101 at the end of 2000), securities firms (171), and registered financial companies (1,357).

At the end of 2000, there were 276 companies listed on the Italian Stock Exchange.
Their market capitalization reached 812 billion euros, and was worth 70 per cent of Italy's GDP, in line with the capitalization/GDP ratio of Germany, but still lower than in France.
Service sector companies accounted for 37 per cent of the market capitalization, followed by banks with 25 per cent, industrial companies with 21 per cent, insurance companies with 14 per cent, and financial companies with 3 per cent.

In the last 5 years the trade volumes of the spot market increased at a rapid pace reaching in 2000 a value of 868 billion euros, while futures and options market exchanges accounted for 984 billion euros and 323 billion euros, respectively.

The extensive privatization program carried out by Italy's government during the 90’s has substantially contributed to the remarkable growth recorded by the Italian stock market.
About two thirds of the overall increase in market capitalization, which grew from 18 per cent to 65 per cent of the GDP between 1989 and 1999, was due to new listings of privatized companies.

In 1999, the Italian Stock Exchange added a New Market to the main exchange, targeting innovative, high growth-potential companies. At the end of 2000, 39 companies were listed on the New Market, with a market capitalization of 22 billion euros.

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