01779cas a2200241 a 4500 AALejournalIMF013486 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484357705 1018-5941 BD-DhAAL BD-DhAAL Zoli, Edda. Italian Sovereign Spreads : Their Determinants and Pass-through to Bank Funding Costs and Lending Conditions / Edda Zoli. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Volatility in Italian sovereign spreads has increased since mid-2011. This paper finds that news on the euro area debt crisis and country specific events were important drivers of sovereign spreads. Movements in sovereign spreads affect CDS spreads and bond yields of Italian banks, and are transmitted rapidly to firm lending rates. Banks with lower capital ratios and higher nonperforming loans were found to be more sensitive to swings in sovereign spreads. Credit supply constraints due to bank funding shortages from the sovereign debt crisis were a major factor behind the lending slowdown in late 2011, while in 2012 weak demand appears to have been driving changes in credit more than supply. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2013/084 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/084/001.2013.issue-084-en.xml IMF e-Library