Credit Risk Disclosure Practices in the Annual Financial Reporting of Large Italian Banks

Scannella, Enzo; Polizzi, Salvatore

doi:10.1007/978-3-030-16295-5_10

Enzo Scannella³ &
Salvatore Polizzi³

Part of the book series: Palgrave Macmillan Studies in Banking and Financial Institutions ((SBFI))

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3 Citations

Abstract

Risk disclosure in banking is particularly important for the efficacy of market discipline, the assessment of bank performance, the efficiency of the financial market, and the overall stability of the financial system. The European banking union and the financial crisis have enhanced the strategic role of credit risk disclosure in banking. The topic of this chapter is the evaluation of credit risk disclosure practices in banks’ annual financial reporting. The empirical research is conducted on a sample of ten large Italian banks. The authors employ content analysis and provide a hybrid scoring model for the assessment of credit risk disclosure. The chapter provides empirical findings which reveal significant differences between banks’ credit risk reporting practices, even though they are subject to similar regulatory and accounting frameworks.

Although this chapter has been written jointly by the two authors, it is possible to identify the contribution of each one as follows. Abstract and Sects. 1, 2, 5, and 6 have been written by Enzo Scannella. Sections 3 and 4 have been written jointly by Enzo Scannella and Salvatore Polizzi. The data were analyzed jointly by the two authors. All the figures and tables were prepared jointly by the two authors.

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Notes

1.
For further information see Beattie and Liao (2014), Freixas and Laux (2012), Gaetano (1996), Polizzi (2017), and Scannella (2018).
2.
A brief overview of the recent history of the bank capital requirements regulation, that has an impact on risk disclosure, follows: Basel Committee on Banking Supervision (2006, 2011, 2015, 2017); Capital Requirements Directives (Directive 2006/48/EC relating to the taking up and pursuit of the business of credit institution; Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions); Regulation n. 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms; Directive 2013/36 of the European Parliament and of the Council on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms. For more detailed information at the national level, see: Bank of Italy (2006, 2013).
3.
For more details see Bastianini et al. (2005); Bisoni (1988); Bisoni et al. (2012); De Laurentis (2004); Dell’Atti (2009); Mazzeo et al. (2005); Nadotti (1995, 2004); Ossola (2005); Paolucci and Menicucci (2008); Rutigliano (2011, 2012, 2016); Tutino (2009, 2015).
4.
The same sample has been used by Scannella (2018) with reference to market risk reporting.
5.
See Scannella and Polizzi (2018) and Scannella (2018) for other scoring models based on analytical grids. See Holsti (1969) and Weber (1990) for further information on content analysis.
6.
Sources: Unicredit (2012–2017) Relazioni e bilancio. Unicredit (2012–2017) Terzo pilastro di Basilea 2. Informativa al Pubblico.
7.
Sources: Intesa Sanpaolo (2012–2017) Relazione e bilancio. Intesa Sanpaolo (2012–2017) Terzo pilastro di Basilea 2. Informativa al pubblico.
8.
Sources: Monte dei Paschi di Siena (2012–2017) Relazione e bilancio. Monte dei Paschi di Siena (2012–2017) Informativa al pubblico. Pillar 3.
9.
Banco Popolare (2012–2017) Relazione finanziaria annuale. Banco Popolare (2012–2017) Informativa al pubblico.
10.
Sources: UBI Banca (2012–2017) Relazioni e bilanci. UBI Banca (2012–2017) Informativa al pubblico. Pillar 3.
11.
Sources: Banca Nazionale del Lavoro (2012–2013) Bilancio d’esercizio. Banca Nazionale del Lavoro (2014–2017) Relazione finanziaria. Banca Nazionale del Lavoro (2012–2017) Pillar 3 report.
12.
Sources: Mediobanca (2012–2017) Bilanci. Mediobanca (2012–2017) Terzo pilastro di Basilea 2. Informativa al pubblico.
13.
Sources: BPER Banca (2012–2017) Bilancio dell’esercizio. BPER Banca, Informativa al pubblico. Basilea 2 Pillar 3.
14.
Sources: Banca Popolare di Milano (2012–2016) Relazione e Bilancio. Banca Popolare di Milano (2012–2016) Informativa al pubblico. Pillar 3.
15.
Sources: Banca Popolare di Vicenza (2012–2016) Relazioni e Bilancio. Banca Popolare di Vicenza (2012–2016) Terzo Pilastro di Basilea 2. Informativa al pubblico.
16.
Bank of Italy appointed the liquidators who sold a part of Banca Popolare di Vicenza to Banca Intesa Sanpaolo.

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Department of Economics, Business, and Statistics, University of Palermo, Palermo, Italy
Enzo Scannella & Salvatore Polizzi

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Enzo Scannella
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Correspondence to Enzo Scannella .

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Marco Biagi Department of Economics, University of Modena and Reggio Emilia, Modena, Italy
Elisabetta Gualandri , Valeria Venturelli & Alex Sclip , &

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Scannella, E., Polizzi, S. (2019). Credit Risk Disclosure Practices in the Annual Financial Reporting of Large Italian Banks. In: Gualandri, E., Venturelli, V., Sclip, A. (eds) Frontier Topics in Banking. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-16295-5_10

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