Bank of Italy: lack of demand led to sluggish lending
A paper published by the Bank of Italy in April suggests that the decline in lending in Italy during the recent credit crunch credit was mainly due to a fall in demand rather than a fall in the supply of loans to creditworthy borrowers.
The paper analyses developments in bank lending in Italy, assessing the relative contribution of demand and supply factors to lending deceleration during the financial crisis.
The paper links the slowdown in lending to a reduction in demand caused by weakness in
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