02620cas a2200301 a 4500 AALejournalIMF020827 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513537627 1934-7685 BD-DhAAL BD-DhAAL International Monetary Fund. Monetary and Capital Markets Department. Italy : Financial System Stability Assessment. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (63 pages) IMF Staff Country Reports <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 This Financial System Stability Assessment paper on Italy highlights that substantial progress has been made in recent years in strengthening the financial sector, however, important weaknesses remain. Bank capitalization and asset quality have improved considerably but are still below the European Union average and the financial sector has large exposures to the Italian sovereign. The financial sector faces important vulnerabilities and a challenging baseline outlook. The sector is highly dependent on the European Central Bank's Targeted Longer-Term Refinancing Operations. Profitability is also still low, particularly in segments of small and mid-sized banks. This reflects in part weak economic growth in Italy over the past decade, as well as high structural operating costs, unsustainable business models and corporate governance weaknesses. Solvency stress tests indicate that many banks with material aggregate total asset share continue to be vulnerable to an adverse scenario. Efforts should focus on further enhancing banks' capitalization, operational efficiency, governance, and business models. Specifically, the authorities should consider more escalated corrective measures for weak banks, utilizing the full gamut of their toolkit, to ensure that banking sector weaknesses do not linger, and costs are contained. Mode of access: Internet Banks imf Depository Institutions imf Financial Institutions and Services imf Micro Finance Institutions imf Mortgages imf IMF Staff Country Reports; Country Report ; No. 2020/081 Full text available on IMF http://elibrary.imf.org/view/journals/002/2020/081/002.2020.issue-081-en.xml IMF e-Library