Notes on Financial Stability and Supervision No. 51

8 May 2026

The role of derivatives in hedging the interest rate risk of Italian firms

The restrictive monetary policy implemented by the European Central Bank in 2022-23 led to a marked increase in interest rates and, as a result, in financing costs for firms, particularly for those with a higher share of variable-rate debt. This study examines to what extent the use of interest rate derivatives has mitigated the impact of rising financing costs for Italian firms. By exploiting granular data on derivatives from the EMIR database - combined with bank loan data from AnaCredit, information on corporate bonds recorded in the Securities Database, and firm-level financial statements from Cerved - the study provides empirical evidence on the use of derivatives by Italian non-financial companies over the period 2021-24. The results show that these instruments are widely used by firms, especially larger ones, to hedge against the risk of rising interest rates, thereby strengthening their financial position. Since the onset of the monetary tightening phase in July 2022, hedging strategies have played a crucial role in mitigating the negative effects of rising interest rates. By combining the cash flows paid and received on interest rate swap positions with those associated with bank loans and issued bonds, the study estimates that derivatives reduced the annual cost of debt by about 20 per cent on average for firms that used these instruments during the period of monetary tightening.