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The structure of banking sectors varies considerably between European Community countries. The advent of the Single Market in 1992 may, therefore, be accompanied by significant restructuring in those countries with hitherto relatively fragmented banking sectors. Such a situation is highlighted with an overview of Italian banking – the evolution of bank‐market relations is described, changes in competition are outlined and the emerging competitive strategies are assessed.

The signing of the Single European Market Act in 1987 committed EC member states to the principles of establishing a single internal market within which all barriers to trade in services and manufacturing and obstacles to the movement of factors of production will be removed. In this context, the liberalisation of financial markets is assessed. Aspects of the present regulatory frameworking affecting suppliers of financial services are examined and the Commission′s proposals for the removal of technical barriers discussed. Some of the positive implications of these proposals for marketing strategies in the banking sector are considered.

This paper aims to examine the market risk disclosure practices of large Italian banks. The contribution provides insights on the way banks should provide information about market risk. The problem related to the asymmetric information between banks from one side, and investors and stakeholders on the other, represents a crucial issue that requires further considerations by scholars and regulators.

This contribution adopts a mixed methodological approach to analyse both qualitative and quantitative profiles of market risk disclosure in banking. This paper analyses the most important documents Italian banks are required to prepare for risk disclosure purposes, namely the management commentary, the Basel Pillar 3 disclosure report and the notes.

The results show that banks do not fully exploit the potentialities of management commentary and Pillar 3 disclosure report. Various areas of information overlapping between the different financial reports worsen the overall comprehensibility and relevance of bank risk reporting.

The reduction of the information overlapping, the careful choice of the location of the information and more appropriate use of the management commentary to provide qualitative information about market risk strategies represent crucial areas of improvement banks and regulators should take into account.

Providing an in-depth analysis of the market risk disclosure practices of a sample of large Italian banks, this paper detects the main drawbacks of their market risk reporting and provides useful recommendations to improve it.