An Overview of ITALY’s Finanancial System

8/11/2019 An Overview of ITALYs Finanancial System

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Presented By:Muksudul HakimTasnim FarhatSuzana Kabir


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Introduction: ItalyItaly, officially the Italian Republic, is a unitary parliamentaryrepublic in Southern Europe. To the north, Italy borders France ,Switzerland , Austria , and Slovenia , and is approximatelydelimited by the Alpine watershed , enclosing the Po Valley andthe Venetian Plain . To the south, it consists of the entirety ofthe Italian Peninsula and the two biggest Mediterraneanislands of Sicily and Sardinia .Capital: Rome

Dialing code: 39Currency: EuroPopulation: 60.92 million (2012), according to World Bank.Government: Constitutional republic, Parliamentary republic,Unitary republic


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Economy of ItalyItaly has a market economy characterized by high per capita GDP andlow unemployment rates. In 2012, it was the ninth-largest economy inthe world and the fifth-largest in Europe in terms of nominal GDP, andthe tenth-largest economy in the world and fourth-largest in Europe interms of PPP. It is a founding member of the G7, G8, the Eurozone andthe OECD (Organisation for Economic Co-operation andDevelopment).Italy has a smaller number of global multinational corporations thanother economies of comparable size, but there is a large numberof small and medium-sized enterprises, notoriously clustered inseveral industrial districts, which are the backbone of the Italianindustry. This has produced a manufacturing sector often focused onthe export of niche market and luxury products, that if on one side isless capable to compete on the quantity, on the other side is morecapable of facing the competition from China and other emerging

Asian economies based on lower labor costs, with higher qualityproducts. [
http://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italy


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The country has an inefficient state bureaucracy, lowproperty rights protection and high levels of corruption,heavy taxation and public spending that accounts for about

half of the national GDP. In addition, the most recent datashow that Italy's spending in R&D in 2006 was equal to1.14% of GDP, below the EU average of 1.84% andthe Lisbon Strategy target of devoting 3% of GDP toresearch and development activities. According to

the Confesercenti, a major business association inItaly, organized crime in Italy represented the "biggestsegment of the Italian economy", accounting for 90 billionin receipts and 7% of Italy's GDP.


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Capital Market in ItalyCapital Market: Borsa ItalianaTrading Hour: The exchange has pre-market sessions

from 08:00am to 09:00am, normal trading sessionsfrom 09:00am to 05:25pm and post-market sessionsfrom 06:00pm to 08:30pm on all days of the week,except Saturdays, Sundays and holidays declared by

the Exchange in advance.


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Capital Market StructureFive parts-1. The electronic share market (MTA): trades

Italian shares, convertible bonds, and warrants.

2. STAR: Segment for High Requirement Shares. market is withinthe MTA and includes companies capitalised from 40 millionto 100 million euros that are already listed and traded in more-traditional sectors.

3. Nuovo Mercato: is dedicated to innovation-driven companies.

4. Mercato Ristretto: Stocks, bonds, warrants, and options notadmitted to the official exchange are traded.5. Premi Market: is for premium contracts on stock exchange

products.


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Derivative Market: IDEM and MIF.Fixed Income Market: MOT (electronic government

bond and securities market), Government Securitiesand Non-convertible bond.


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Capital Market: SizeSize: Borsa Italiana organises and manages the Italianstock market with the participation of nearly 130domestic and international brokers that operate inItaly or from abroad through remote membership,using a completely electronic trading system for thereal-time execution of trades.

In 2005, the companies listed on the Borsa were worthUS$890 billion


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Capital Market: Participants130 international and domestic brokers.More than 102 Corporations.

Principles in the economy: CONSOB and the Bancad'Italia.


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Capital Market: ProductsDerivativesGovernment Securities

Non convertible bondsEuro bonds Asset backed securities

Preferred Stocks and Venture Capital funds are not very popular.


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Money Market: StructureMoney market in Italy is divided into to two parts-

a) Organized Market: it has three components

1. Central Bank2. Commercial banks3. Co-operative banks

b) Unorganized Market: It has two components-1. Call Money Market2. Financial Institutions


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Money Market: Size9th largest economy in the world.4th largest economy in Europe.

This country has 1.4 million people with greater than$1 million in Net Wealth.National Wealth is $11.857 trillions.


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Money Market: ParticipantsThere are 841 banks and other financial institutions.Banca d'Italia serves as the guardian of the Italian

money market.


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Money Market: ProductsMost popular money market products are:

Treasury Bills

Banker AcceptanceCommercial PapersFuture Contracts


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Euro-currency MarketEuro MOT: Electronic euro bond market. Tradesgeneral euro bonds, foreign issued bonds, asset backedsecurities.

Documents

An Overview of ITALY’s Finanancial System