Italian Banks’ Ownership, Governance and Performance: The Evolving Role of Foundations

The privatization and modernization process of the Italian banking system,
started in the 1990s, was helped also by the setting up of the Banking
Foundations. Indeed, they initially supported Italian banks in the process of
consolidation and more recently in the process of recapitalisation, as a
consequent need of the crisis. The role played by the foundations in banks’
ownership therefore has always been crucial. Accordingly, they exerted (and
still exert) a profound impact on banks’ governance and performance and
ultimately on the financial market.
This chapter aims at analysing the trend of the foundations’ share in the
capital of the Italian banks, also considering the evolution of the regulatory
framework. Our principal goal is to highlight whether their shareholding
contributes to the improvement of the stability, governance and profitability
of the Italian banks.