Report Says Mafia Now ‘Italy’s No.1 Bank’ as Economic Crisis Bites

By James Mackenzie | January 11, 2012

Organized crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest “bank” and squeezing the life out of thousands of small firms, according to a report on Tuesday.

Extortionate lending by criminal groups had become a “national emergency,” said the report by anti-crime group SOS Impresa.

Organized crime now generated annual turnover of about €140 billion ($178.92 billion) and profits of more than €100 billion [app. $128 billion], it added.

“With €65 billion [$83 billion] in liquidity, the Mafia is Italy’s number one bank,” said a statement from the group, which was set up in Palermo a decade ago to oppose extortion rackets against small businesses.

Organized crime groups like the Sicilian Cosa Nostra, the Naples Camorra or the Calabrian ‘Ndrangheta have long had a stranglehold on the Italian economy, generating profits equivalent to about 7 percent of national output.

Extortionate lending has become an increasingly sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, prostitution, gambling and racketeering, the report said.

“The classic neighborhood or street loan shark is on the way out, giving way to organized loan-sharking that is well connected with professional circles and operates with the connivance of high-level professionals,” the report said.

It estimated about 200,000 businesses were tied to extortionate lenders and tens of thousands of jobs had been lost as a result.

Old style gangsters handing out cash in bars and pool halls have been replaced by apparently respectable bankers, lawyers or notaries, the report said.

“This is extortion with a clean face,” it added. “Through their professions, they know the mechanisms of the legal credit market and they often know the financial position of their victims perfectly.”

Small businesses, who have struggled to get hold of credit during the economic slowdown, may have been increasingly tempted to turn to the mafia, said the report.

Typical victims of extortionate lending were middle-aged shopkeepers and small businessmen who would struggle to find a new job and who were ready to try anything to avoid bankruptcy, it added.

“They are usually people in traditional retail sectors like food, greengrocers, clothes or shoe shops, florists or furniture shops. These are the categories which, more than any other, are paying the price of the (economic) crisis,” it said.

According to a separate report this week from small business association CNA, 56 percent of companies had seen banks tighten their lending requirements in the past three months.


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Latest Comments

  • January 16, 2012 at 3:07 pm
    Kev1n says:
    You do realize this article is about Italy, not the US?
  • January 15, 2012 at 11:38 am
    superlitebber says:
    The real problem is not the Mafia. A gang of neighbour thugs does not bring down governments. Loan sharking is mainly a last resort, especially when banks start tighten their ... read more
  • January 13, 2012 at 5:09 pm
    The Other Point of View says:
    Another "regulation is strangling us" post. What a surprise on the IJ boards. Cite an example of a regulation that prevents small banks from lending. You can't. Because it's n... read more
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