Italy’s troubled banks may suffer an additional 10 billion euros ($11 billion) in losses from the sale of their bad loans at current market prices, said Ignazio Visco, Bank of Italy governor and ECB governing council member.
“If they were sold at the very low prices offered by the few large specialist debt collection agencies active in the market today, which pursue very high returns, the amount of additional writedowns would be in the order of 10 billion euros,” Visco said on Wednesday at the central bank’s annual meeting in Rome. He pointed out that the country’s troubled banks have 20 billion euros in net bad loans.
Italy is struggling to fix a crisis legacy of about 360 billion euros of soured loans in its banks’ balance sheets that is holding back credit and weighing on the country’s weak recovery. Italian authorities are trying to prop up Banca Monte dei Paschi di Siena SpA and two banks in the northern region of Veneto, using a provision in the EU’s bank-failure rules that allows governments to provide state aid.
GBP Under Pressure After Latest Poll
APAC Commodities: Oil Refuses To Boil As Gold Melts Away
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam
Latest posts by Craig Erlam (see all)
- OANDA Market Insights podcast with Jazz FM - 06/22/2018
- All eyes on OPEC - 06/22/2018
- GBP rallies on hawkish BoE - 06/21/2018