Rome. The bank Monte dei Paschi di Siena (MPS), which is in the center of the banking crisis in Italy, had taken the initiative by publishing a rescue plan for several billions of euros when there was not even an hour to make themselves the results of the stress test.
Shortly after it was confirmed that the MPS had received, as the worst note expected. However, other Italian banks fared better than expected, what the president of the Italian Banking Association, Antonio Patuelli, used to ensure the “credibility of Italian banks has been strengthened.”
Although the MPS is ready to attack their problems and the fact that other banks did such a bad paper as feared, the fundamental problems of the Italian banking sector remain.
the Monte dei Paschi di Siena , founded in 1472, it aims to get rid of more than half of their non-performing loans and to carry out a capital increase of more than 5 billion euros.
the huge amount of non-performing loans, by volume total of about 360 billion euros, is one of the biggest problems of Italian banking. This volume is equivalent to approximately one third of all loans at risk of default in the European Union and is also a legacy of prolonged recession, whose consequences continue to plague the third eurozone economy.
“In Italy, banks continue to suffer the consequences of the economic crisis in the country. Lack growth for profits and offset losses from bad loans. This problem still exists, “said today dpa banking professor Martin Hellmich, of Frankfurt . School of Finance
banks are trapped in a vicious circle: in the situation where they are can not grant new loans, slowing economic growth. However, it is precisely lenders that depend on the presence of a robust economy to strengthen their balance sheets by their own efforts.
“The Italian banking crisis has not been overcome. The market will keep pushing banks clean up their balance sheets that, “said meanwhile the banking expert Philipp Wackerbeck, the consulting firm PwC.
in 2014 stress tests had suspended nine Italian banks. However, according to the president of the Union of German Banks, Michael Kemmer, little has been done after overcoming the weaknesses of financial institutions. Experts also Daniel Gros and Willem Pieter de Groen, the think tank CEPS in Brussels, emphasized that “Italian banks suspended or were about to suspend all tests of European stress tests conducted so far.”
analysts also see other serious problems in Italy. In many places there for years mismanagement and nepotism without anyone being held to account. Add to this a too lax lending is added. In addition, the Italian banking sector is totally oversized, heavily fragmented and inefficient. In Italy, politics and banks are closely intertwined, so a banking crisis can quickly lead to a crisis of the state.
Therefore, Prime Minister Matteo Renzi and his government have been around months dealing the problem of banks. Renzi faces in Italian politics to strong pressure. The top priority for him is to prevent small investors affected by the possible rescue plans for banks, which is against the rules of the European Union. Last year committed suicide in Italy a retiree who had lost their life savings because of a bank bailout and many voters blamed the government for this tragedy.
In Brussels and other European capitals is growing fear political destabilization in Italy. In October in the Mediterranean country the important referendum on the proposed constitutional reform, which Renzi has linked its own political future. Should Renzi suffer a defeat, Italy could be doomed to call early elections, which would be a horror scenario for the EU because those elections could help up to power the Movement 5 Star, Eurosceptic and totally unpredictable political organization.
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