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Archive » September 2020 » Less is more. Less Significant Institutions: challenges and opportunities

Less is more. Less Significant Institutions: challenges and opportunities

Marina Brogi, Valentina Lagasio, Chiara Torriero
September 2020 - n. 9
Keywords: Vigilanza, Less significant institutions, Bce, Banca d’Italia
Jel codes: G21, G28

The stability of a bank is determined by the combined achievement of the three corporate balances, economic, financial and patrimonial, which are in turn affected also by regulation. The latter, in addition to promoting sound and prudent management, should ensure a level playing field and fair competition by the application of the principle of proportionality, that is by grading the rules basing on the size and complexity of the bank, the risk taken and the business model adopted. However, regulation is not the only exogenous factor impacting on banking operations; the outbreak of the Covid-19 health emergency confirms the important impacts that can be generated also from the macroeconomic context.

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