The Curious Case of Italian Interlocking Directorates

M. Corradi and J. Nowag (eds.), The Intersections between Competition Law and Corporate Law and Finance (Cambridge: Cambridge University Press, forthcoming 2021)

Bocconi Legal Studies Research Paper No. 3661733

27 Pages Posted: 30 Jul 2020 Last revised: 19 Dec 2020

See all articles by Federico Cesare Guido Ghezzi

Federico Cesare Guido Ghezzi

Bocconi University - Department of Law

Chiara Picciau

University of Brescia - Department of Law

Date Written: July 24, 2020

Abstract

In this chapter, we provide an overview of the Italian legislation on interlocking directorates and its enforcement in the last decade. In 2011, Italy introduced a specific anti-interlocking provision aimed at promoting competition in the banking, insurance, and financial sectors. After explaining why these personal ties may facilitate or reinforce the achievement of a collusive or quiet life equilibrium among competitors, we attempt to evaluate the effectiveness and limits of the Italian interlocking ban. Using the banking sector as a case study, we present data on the number of interlocking directorates that persist among the first 25 banking groups operating in Italy at the end of 2018. The result of our study is that interlocking directorates among major Italian banks seem to have disappeared. This is in line with empirical studies that show that, in the period following the entry into force of the Italian interlocking ban, bank lending rates fell, indicating more vigorous competition. We conclude our chapter questioning whether the 2011 Italian interlocking ban has had any effect on the ownership structure of the relevant market players, for instance contributing to the disposal of minority and cross-shareholdings held by competing companies, and on the composition of their governing bodies.

Keywords: interlocking directorates, Italian interlocking ban, anti-interlocking provision, personal ties, ownership ties, financial firms, competition

JEL Classification: G3, G30, K2, K20, K21, K22, L4, L40, L41

Suggested Citation

Ghezzi, Federico Cesare Guido and Picciau, Chiara, The Curious Case of Italian Interlocking Directorates (July 24, 2020). M. Corradi and J. Nowag (eds.), The Intersections between Competition Law and Corporate Law and Finance (Cambridge: Cambridge University Press, forthcoming 2021), Bocconi Legal Studies Research Paper No. 3661733, Available at SSRN: https://ssrn.com/abstract=3661733 or http://dx.doi.org/10.2139/ssrn.3661733

Federico Cesare Guido Ghezzi (Contact Author)

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, Milan 20136
Italy

Chiara Picciau

University of Brescia - Department of Law

via San Faustino 41
Brescia, BS 25121
Italy

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