In this work we measure the time taken to close positions classified as bad loans between 2005 and 2016 for the universe of Italian non-financial firms. By means of an econometric model, we then evaluate the differences in closure times with respect to the year of classification as a bad loan and with respect to the main features of the position, of the borrowing firm and of the size of the lending bank.
The analysis shows that closure times considerably increased for loans classified as bad between 2008 and 2012 and then progressively decreased up to 2016, when they returned to values that are in line with the initial ones. Throughout the whole reference period, closure time turns out to be on average longer for larger loans, for loans to firms with relationships with more than one bank, for those to construction firms or to firms headquartered in the Centre and South.
