ABI FINANCIAL OUTLOOK Consensus di previsione

1
Variable parameter length of proceeding
Figure D
Cumulative recovery function
Currently, Italian banks collect 38 of 100,
through insolvency proceedings
The recovery rate (38) being equal, how does the
cumulative recovery function change by decreasing
the length of the proceeding?
45
40
38
35
30
recovered
t 7 baseline scenario
25
t 6
t 5
20
t 3.5 best case
15
10
5
0
0
1
2
3
3.5
4
5
6
7
8
9
Recovery time (year)
2
Variable parameter recovery rate
Figure E
Cumulative recovery function
70
60
Best case recovery rate 55
55
Hp recovery rate 50
50
Hp recovery rate 45
45
40
Baseline scenario recovery rate 38
38
recovered
30
20
10
0
0
1
2
3
3.5
4
5
6
7
8
Recovery time (year)
3
Scenarios at stake
Figure F
Scenarios on which the impact of insolvency
regulation is calculated
60
T
Target (length effect recovery effect)
55
50
L
B
Length effect
40
38
Baseline scenario
recovered
30
20
10
0
0
1
2
3
3.5
4
5
6
7
Average length of bankruptcy proceeding (year)
4
Figure G
Impact evaluation
Finally, a more effective and efficient
insolvency system results in much lower levels of
LGD...
Length of bankruptcy proceeding
7
6
5
3.5
Length effect
75.42
69.23
38
73.69
71.92
45
69.96
67.97
65.96
62.92
Recovery
50
65.85
63.74
61.60
58.38
rate
53.85
55
61.73
59.51
57.25
Baseline scenario
Target scenario (length effect recovery effect)
5
Figure H
Impact evaluation
Impact of Insolvency Regulation on the Economy in
Terms of Differential Cost of Credit
1.8
1.629
1.6
Length effect
Recovery effect
1.4
Overall effect
Figure
1.2
1.062
Regulatory burden in terms of differential cost
of credit
1,158
1.0
0.781
0.8
0,756
0.6
0.483
0,557
0.381
0.4
0,344
0,272
0,471
0.2
0,306
0.047
0,225
0,139
0,109
0
PD 0.03
PD0.5
PD 1
PD2
PD3
PD5
Probability-of-default levels