Mr. Massiah added that he and the board ultimately changed the structure of UBI to ensure transparency. Votes are now apportioned to the size of the investment.

Mr. Massiah spends hours with his branch managers, counseling them on how to more intently scrutinize balance sheets while delivering bad news. Even when they face a clash between cold numbers and what he calls “the important values of life” — a young couple wanting a mortgage, for example, so they can buy a home and start a family.

“It’s difficult for the people to manage the emotional part of the story,” Mr. Massiah said. “The guys that we do have at the branch are human beings and feel bad. It’s terrible to say no, in particular in our culture. In a way, in the Anglo-Saxon culture, there is a more direct way to interact. Our culture is less straight. Our culture is less confrontational.”

But Italy is awash in the expensive consequences of social graces governing banking.

“Sometimes a ‘no’ is protecting somebody,” Mr. Massiah said. It’s a polite way of saying to a young couple, “I’m killing you, accepting that mortgage. Please rent a house for the moment, and then when you earn more you can buy a house,” he said. “We have to understand that we have to live at the level that we can allow.”

Damping the Flames

Sometimes “no” is just another word for not knowing how to assess the deal. This is Marco Rossi’s takeaway, as he looks back at his futile effort to pry loose a loan.

Mr. Rossi had been working as a business consultant when, six years ago, he stumbled on an opportunity of his own. A German pharmaceutical company was in the process of merging with an Israeli firm. The two companies needed to sell some overlapping operations. One unit sold over-the-counter drugs like aspirin. Another owned a respiratory drug.

Mr. Rossi purchased the two units for the grand total of nothing. He merely agreed to take responsibility for paying 80 workers along with their pension obligations. He negotiated a deal with the union, agreeing to eschew layoffs. And he bought licenses from other Italian pharmaceutical companies enabling him to sell additional drugs, seeking to squeeze more revenue out of his sales force.