Last August the Italian Government passed important amendments to the Bankruptcy Law and the Civil Procedure Code, with the aim to increase the speed and efficiency of insolvency procedures and property foreclosures, and to promote higher recovery rates for creditors.
Preliminary estimates suggest that the average duration of bankruptcy procedures could be halved in a favorable scenario. The average duration of foreclosures might also be significantly shortened.
As the length of judiciary procedures is among the root causes of the large stock of non-performing loans (NPLs) in Italian banks’ balance sheet, the reform is expected to help address the problem. It should boost the value of NPLs and foster the development of a private market for these assets.