Financial crisis and disclosure requirements in Italy: The “Consob blacklist”

Listed companies are subject to significant transparency obligations, which are essential for correct investor’s portfolio allocation and to ensure the proper functioning of markets. The issue is particularly relevant as disclosure requirements related to listing entail a trade-off between costs and benefits of transparency which should be carefully evaluated. In Italy, the "Consob blacklist" includes listed companies which are subject to more frequent obligations of information disclosure, pursuant to art. 114 of Legislative Decree, 24 February 1998, n. 58. Since its establishment in 2002, 79 companies have been included, a large number especially when compared to the small size of the Italian market. This study analyses primary elements of this new instrument such as its effectiveness in investor protection, characteristics and recurring elements of companies included in the list, the role played by general economic trends in determining conditions for inclusion, elements able to influence the possible outcome (favourable or unfavourable) deriving from the inclusion in the blacklist.