Financial Stability Report No. 1 - 2018

Robust economic growth at international level is lessening the risks to financial stability, but an escalation in geopolitical tensions could impact investors' confidence and have negative repercussions on the markets.

In Italy the financial situation of households is sound and the economic recovery is mitigating firms' vulnerability, though fragilities still remain for some. Although improvement continues in the public finances, the debt-to-GDP ratio is falling very slowly.

The proportion of non-performing exposures in banks' balance sheets is in marked decline, also as a result of massive sales; in many cases, however, it remains high. The gap in terms of capitalization has narrowed compared with the average for the other European countries. While the overall profitability of banks is improving, it remains poor for many.

Italian insurance companies' solvency has improved, buoyed in part by profitability being stable and high, though companies remain exposed to risks associated with the possible heightening of tensions on the sovereign debt market. The steady growth in assets managed by investment funds operating in Italy poses limited risks for financial stability.