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The recovery process duration in real estate credits: economic cycle, liquidity and efficiency of enforcement procedures

Lucia Gibilaro, Claudio Giannotti
June 2009 - n°6
Jel codes: G21, L85

The minimization of financial losses and costs stemming from the credit recovery process is strictly connected with the time necessary to complete the procedure: in real estate credits, it depends on the liquidity and the efficiency of the enforcement procedures. The paper investigates the relationship between the national and regional economic cycle trend and, respectively, the liquidity of property markets and real estate enforcement procedures efficiency through an empirical analysis for the Italian market. The empirical evidences do not support the economic cycle effects on the property market liquidity and on the competent courts efficiency. However, some real estate sectors appear more reactive toward the economic cycle.