In this chapter, we provide an overview of the Italian legislation on interlocking directorates and its enforcement in the last decade. In 2011, Italy introduced a specific anti-interlocking provision aimed at promoting competition in the banking, insurance, and financial sectors. After explaining why these personal ties may facilitate a collusive or quiet life equilibrium among competitors, we attempt to evaluate the effectiveness and limits of the Italian interlocking ban. Using the banking sector as a case study, we present data on the number of interlocking directorates that persist among the 25 largest banking groups operating in Italy at the end of 2018. The result of our study is that interlocking directorates among major Italian banks and banking groups seem to have disappeared. This is in line with empirical studies showing that, in the period following the entry into force of the Italian interlocking ban, bank lending rates fell, indicating more vigorous competition. We conclude our chapter by questioning whether the 2011 Italian interlocking ban has had any effect on the ownership structure of the relevant market players, for instance contributing to the disposal of minority and cross-shareholdings held by competing companies, and on the composition of their governing bodies.

Recent literature on common ownership has employed econometric findings on the correlation between parallel holdings and prices on specific product markets to support policy claims directed to intervene in the investment strategies of the worlds largest investment corporations. Regardless of the validity of such econometric findings, direct intervention in the investment strategies of large investment management corporations may produce a series of unwanted negative repercussions on the positive externalities that are correlated to the presence of parallel holdings (e.g. enhanced pursuance of ESG objectives) without actually sorting out the expected pro-competitive effects – because of the presence of other co-causation factors that determine price increases. Sound policy interventions should also consider the larger picture (concentration on the product markets, concentration on the financial services market, status of governance practices and policies and finally also geopolitical variables) before embarking in any policy strategy in this field.