The so called “Banks Decree” Decree (Law Decree no. 59/2016, hereinafter the “Decree”), published on the Official Gazette and converted into Law no. 199/2016, has recently entered into force.

The main purpose of the Decree is to grant a partial reimbursement to investors of few local banks that were resolved in November 2015. However, the Decree has also introduced additional innovations which represent a further significant step in the Government’s effort of streamlining the credit recovery activities and implementing a more creditor-friendly environment.

In particular, the Decree has introduced, inter alia, four relevant amendments:

  1. a new type of pledge, without dispossession of the debtor, which should constitute the Italian floating charge;
  2. lenders and borrowers (who are companies or entrepreneurs) are allowed to enter into, at the time of the origination of the mortgage loan or thereafter, a repossession agreement;
  3. a new electronic register, held by the Ministry of Justice, where all the real estate enforcement proceedings, insolvency and pre-insolvency procedures will have to be filed, and
  4. the enforcement and insolvency procedures are now subject to changes in order to expedite them.

Creditors, especially foreign investors, will appreciate these amendments as a sign that the Italian government is continuing to promote creditor-friendly bankruptcy and restructuring to encourage foreign investment.