This paper examines the issuance of bonds by Italian banks from the onset of the global financial crisis in 2007-08 to the end of 2022, in light of key macroeconomic developments and unconventional monetary policy measures adopted in the euro area over the same period.
Since the sovereign debt crisis, gross bond issuance by Italian banks has declined, as customer deposits and longer-term refinancing operations with the Eurosystem gradually increased. This has mitigated the transmission of financial shocks to the cost of funding but made the banking system more reliant on quantitative measures of monetary policy. With monetary policy normalization, banks may again increase bond financing to replace their maturing funds, thus further tightening funding conditions for the private sector.
