No. 1486 - Asset revaluations and credit conditions

by Michele Cascarano, Cristina Demma and Litterio Mirenda
April 2025
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The paper evaluates whether firms that carried out the extraordinary revaluation of balance sheets assets as of December 31, 2020, granted by DL 104/2020 ('August Decree'), gained access to bank financing at more favorable terms compared to companies that did not carry out the revaluation. It also analyzes the heterogeneity of the effects in relation to the main characteristics of the firms and the lending banks, identifying the underlying mechanisms.

Firms that revalued their assets benefited from lower interest rates on loans, received more short-term credit, and had a higher likelihood of establishing new banking relationships. These effects  were more pronounced for more 'opaque' firms, suggesting that the results depend on the increased information provided through the financial statements after the revaluation, especially in the case of banks that do not use internal rating models.

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  1. 23 April 2025
    No. 1486 - Asset revaluations and credit conditions
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