Loans

Rome, Italy (AHN) – Italy’s banking system has a new “boss.”

Thanks to the country’s ballooning debt crisis, the Mafia is Italy’s biggest “bank,” according to a study by Confesercenti.

The country’s four mafia groups have expanded from their storied strongholds in the sun-baked “Mezzogiomo” south of Rome, and have spread their tentacles across the entire country, taking advantage of the economic crisis to purchase ailing businesses, “juice” others and charge large “vigs” to most.

Organized crime in Italy has generated an annual turnover of about $178.89 billion in profits and more than $100 billion euro in profits, making it the head “Capo” or biggest bank in Italy, the study found.

The country’s top crime groups, like the Sicilian Cosa Nostra, the Naples Camorra and the Calabrian “Ndrangheta, have long had a stranglehold on the Italian economy, generating profits equivalent to some 7 percent of national output.

Extortionate lending has become a sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, gambling and racketeering, according to the report released Tuesday.

The old style gangsters hanging out in bars, lurking in dark alleys and hiding in big black cars have been replaced by “reputable” bankers, lawyers and notaries, the report noted.

Small businesses, which have struggled to get credit during the economic recession, have turned to the mafia for loans, seeing no other choice.

The typical victims of extortionate lending are small businessmen and middle-aged shopkeepers.

The exorbitant “vigs” (interest) the Mafia charges for loans have many pushed against a wall and worried they might be “clipped.”

As the Mafia chiefs moved into new areas in Italy, they also moved into new businesses such as public health, transport and logistics.

Confescercenti, which represents 270,000 small-to-medium businesses, said the new technocrat government of Mario Monti must work to help firms retake territory occupied by the Mafia.

But it will be tough going as organized crime in Italy controls everything from gambling to construction to the disposal of industrial and residential waste.

View full post on All Stories