No. 202 - Businesses seized from organized crime groups: their relations with the banking system

This paper analyzes the relations between businesses seized from organized crime and the banking system. The first part of the paper examines legislative developments regarding seized and confiscated assets and highlights the persistence of problem areas despite the efforts to create a systematic framework for measures to combat economic crime on the economic plane. The analysis of firms' credit and operational profiles in the second part of the paper finds no evidence that banks, following the confiscation order, impose more onerous terms and conditions with respect to other companies in the same sectors, located in the same geographical areas and having similar operational profiles. This finding appears to be linked to the observation that the deterioration of the main indicators dates back to the years before the confiscation order, presumably in part following preventive action by the banks, prompted as a precaution to reduce their exposure at the first hint of a firm's involvement in anti-mafia investigations. The paper concludes with implications for policy, taking into consideration the crucial role of expectations, the need to restore firms to healthy conditions through timely planning and the importance of economically efficient operational choices.