Eurozone's South still poses an enormous risk

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And while Greece's problems continue to be kicked down the road, a new problem is coming to the forefront: Italy is facing a full-blown banking crisis. On Tuesday, trading in Monte dei Paschi di Siena, the world's oldest bank and the third-largest lender in Italy, with about 170 billion euros ($190 billion) in assets, was halted after the shares slid nearly 6% over concerns of weak investor interest in its emergency rescue plan. About 50 billion euros, or about 30% of the bank's assets, are bad loans. And while Atlante, the privately funded bank bailout fund, will be buying assets, BMI Research says that alone may not be enough. Additionally, the country's two largest lenders, UniCredit and Intesa Sanpaolo, are among those backing the bailout fund, so their bottom lines will feel it if things go bad.

Italy banking crisis brews, investors balk at Monte dei Paschi bailout - Business Insider

It's not just Monte dei Paschi that is in trouble. Italy's entire banking system is at risk as nonperforming loans have climbed to account for 17% of all loans. Earlier in 2016, the banks Popolare di Vicenza and Veneto Banca saw Atlante take controlling stakes, and additional capital injections were made in August, putting further pressure on the country's healthier banks.

Italy banking crisis brews, investors balk at Monte dei Paschi bailout - Business Insider