Clifford Chance

Public State guarantee to secure securitisations of non-performing loan receivables: the Italian 'bad bank' solution?

17 February 2016

On 16 February 2016, a set of measures presented by the Italian Government entered into force following the publication of the long awaited Law Decree no. 18 of 14 February 2016 (the "Banks' Law Decree")1 aimed at fostering the disposal by Italian banks of their portfolios of non-performing loans accumulated during the recession period. Although the new measures are nothing like the bad bank structures introduced in some other European countries over the past few years, they represent a significant (and apparently the only possible) step to allow Italian banks to reduce their exposures and clean up their balance sheets, with a view to enhancing the economic growth.

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