NON PERFOMING LOANS AND THE MORAL HAZARD, A STUDY OF THE ITALIAN BANKING SYSTEM

This study investigates the connection between non-performing loans in Italian banks from 2008 to 2022 and the lending strategies adopted during this period. It explores the credit crunch theory post-2008 crisis and the potential moral hazard behavior of bank managers. The research aims to identify opportunistic behavior or moral hazard concerns within Italian banks using a panel data regression model. The impact and the dynamics that non-performing loans have had in the Italian banking system during the studied period have made Italy the best fit for this analysis. The work comprises five chapters: literature review on non-performing loans and moral hazard, a summary of prior empirical findings, an empirical analysis section with two distinct approaches, and presentation of results. This study offers insights into the intricate relationship between non-performing loans and moral hazard in Italian banks after the 2008 crisis, contributing to a better understanding of this critical issue.