The work provides a descriptive analysis of two recent episodes of capital outflows from Italy: the first during the peak of the euro-area sovereign debt crisis in 2011-2012 and the second in connection with the tensions on the Italian bond market in 2018. The work also examines the portfolio choices of euro-area investors in the 2009-2018 period with the aim of assessing possible differences among holder sectors in times of financial stress.
The 2018 episode differed substantially from that of 2011-2012: sales of Italian securities by foreign holders were more limited and Italian banks' net foreign borrowing increased. Extending the analysis to the euro area shows that during periods of severe turmoil on the sovereign market, all categories of foreign investors tend to reduce their exposure, unlike resident investors.
