02152cas a2200253 a 4500 AALejournalIMF017048 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475527513 1018-5941 BD-DhAAL BD-DhAAL Jobst, Andreas. Profitability and Balance Sheet Repair of Italian Banks / Andreas Jobst, Anke Weber. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (34 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 The profitability of Italian banks depends, among other factors, on the strength of the ongoing economic recovery, the stance of monetary policy, and the beneficial effects of current and past reforms, notably to address structural obstacles to resolving nonperforming loans (NPLs) and to foster banking sector consolidation. Improved profitability would enable banks to raise capital buffers and accelerate the cleanup of their balance sheets. This paper investigates quantitatively the current and prospective earnings capacity of Italian banks. A bottom-up analysis of the 15 largest Italian banks suggests that the system is on the whole profitable, but that there is significant heterogeneity across banks. Many banks should become more profitable as the economy recovers, but their capacity to lend depends on the size of their capital buffers. However, a number of smaller banks face profitability pressures, even under favorable assumptions. There is thus a need to push ahead decisively on cleaning up balance sheets, including through cost cutting and efficiency gains. Mode of access: Internet Weber, Anke. IMF Working Papers; Working Paper ; No. 2016/175 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/175/001.2016.issue-175-en.xml IMF e-Library