Shaky Italian Banks reinforce uncertainty in Europe

Mitch Taylor

Supervised Investments Australia

Italy’s political stability is precarious due to the perturbing condition of its banks. The most recent data published by the European Banking Authority on 22 July recorded the nonperforming loan (NPL) ratio of Italy’s banks at 17%, compared with a 5.7% average amongst EU members. The total value of bad loans in Italy is €360 billion, 20% of its GDP, whilst the banks have only provided for €144 billion. Recapitalising banks in Italy effectively requires ECB approval, and herein lies the problem. EU rules introduced on 1 August 2013 prohibit governments from using taxpayer money to bail out banks. In Italy, approximately one–third of subordinated bonds are held by retail investors. Consequently, if the banks are unable to pay bondholders, there will be major political repercussions for Prime Minister Matteo Renzi. Click Below to read Joseph Constable's report. (VIEW LINK)


Mitch Taylor
Mitch Taylor
Portfolio Manager
Supervised Investments Australia

Mitch is Portfolio Manger of the Supervised Fund, an absolute return fund with a focus on Australian small companies. Mitch has been with Supervised Investments since 2010, previously he worked for a top tier global credit hedge fund in London...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.