ABSTRACT
This chapter analyses changes in the Italian banking system. It examines the restructuring process of the banking system in Southern Italy as well as its effects on the local productive system. The chapter briefly presents a framework which aims to explain the reasons for the dualistic behaviours of the Italian banking system. The 1990s were a particularly important decade for the Italian banking system. The abolition of the administrative controls and market competition brought about by financial liberalisation directed the banking system towards a more efficient organisation. The restructuring process of the banking system has not been homogenous across regions. The banking system will increasingly perform its natural role of financing investments on the basis of risk and return considerations, paying particular attention to recent developments in risk evaluation techniques. The presence of the State in the banking system has typically been important for Italian and, especially, Southern banks.
