By the end of May this year the volume of Italian non-performing loans (NPL) had already risen to EURO1.5 million, accounting for 14% of securitization volume of that country since the start of 2001, but with the securitization Law No. 130/99 window closed, market analysts wonder how viable the structure will be going forward.

The Italian government's securitization Law No. 130/99 had given a two-year tax incentive in an effort to boost balance-sheet returns and optimize banks' fiscal positions. This ultimately allowed banks to spread losses over a five-year period if the transactions were completed within two years from the date when the law was issued, in 1999.

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