(Finance) – Compared to the highs reached in 2012, theamount of debt securities in circulation in Italy And decreased by about a third at the end of 2022, despite emissions from non-financial companies having doubled. The phenomenon can be traced back to less use of bond issues by the banking sector, given the increase in deposits and refinancing at the Eurosystem. We read it in a financial stability and supervision note from the Bank of Italy. The market for structured bank bonds, in particular, has shrunk drastically and has not been compensated by the increase in certificate issues in recent years.
Going into detail, a December 2022 ordinary bonds, securitizations and covered bonds represented almost all of the securities in circulation, 39, 27 and 20 percent respectively; the remaining 15 percent consisted mainly of complex securities such as subordinated, structured and AT1 subordinated bonds (7, 4 and 2 percent respectively).
Over the same period, on average just under two-thirds of the bonds were issued by resident banksapproximately 20 percent from special purpose vehicles and the remainder from businessesfrom non-bank intermediaries (including the Cassa Depositi e Prestiti) and by the public administration (regions, provinces and municipalities)
From the highs at the end of 2012 to the end of 2022, the amount of securities in circulation net of redemptions has drastically decreased (from 1333 to 847 billion). The reduction in ordinary bonds contributed by more than 460 billion to the overall reduction of 486 billion euros recorded in the period and that of structured bonds by approximately 80 billion, only partially offset by the increase in other debt securities, including covered bonds (from 129 to 167) and the securitisations (221 to 227).
However, in relation to the type of issuers, there was a reduction in the stock of bank bondsonly partially offset by the growth in bonds issued by companies and other intermediaries.
In contrast to the other sectors, between the end of 2008 and 2022 the resident businesses have considerably increased their use of the bond market, from 61 to 168 billion euros of securities in circulation, although discontinuously as in some years negative net issue balances have been recorded.