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Archive » February 2017 » The Npl disposal problem: a comparison between Sale and Securitization

The Npl disposal problem: a comparison between Sale and Securitization

Enrica Bolognesi, Cristiana Compagno, Marco Galdiolo, Stefano Miani
February 2017 - n. 2
Jel codes: G21, G23, G28

The issue of the Non-Performing Loans (Npls) management has assumed a strategic importance for European banks. Italian banks are recently called to find the most efficient disposal of their bad loans. This paper aims at comparing the alternative strategies of Sale and Securitization; the latter designed to exclude the market investors from the process (in house). We show that Securitization offers the best results in terms of returns (minor losses) and a shareholders’ commitment on new resources that depends on the structure details of the operation.

 

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