February 2016

[admin]

While markets are partying, meanwhile, in Italy:

Italy, the eurozone's third-largest economy, is in a full-blown banking crisis. Four small banks were rescued late last year. The big ones are teetering. Their stocks have crashed. They're saddled with nonperforming loans (defined as in default or approaching default). We're not sure that the full extent of these NPLs is even known. The number officially tossed around is 201 billion euros. But even the ECB seems to doubt that number. Its new bank regulator, the Single Supervisory Mechanism, is now seeking additional information about NPLs to get a handle on them. Other numbers tossed around are over 300 billion euros, or 18% of total loans outstanding. The International Monetary Fund shed an even harsher light on this fiasco. It reported last year that over 80% of the NPLs were corporate loans. Of all corporate loans, 30% were nonperforming, with large regional differences, ranging from 17% in some of the northern regions to over 50% in some of the southern regions.

Italy facing a full-blown banking crisis - Business Insider