Italian Banks shares are plummeting
Duncan Richardson, News Editor
25 Jan 2016, 4:43 p.m.
Europe has grown accustom to financial panic. Greece has been pulled back from the precipice not once but twice, Cyprus has been bailed in and now Italian banks shares are plummeting.
Shares in Italian lender, Monte dei Paschi’s fell 18.5% last Wednesday and are down 57% so far this month. Even Unicredit’s one of Italy’s largest banks has seen its share price plunge 27% since the start of the year. Italian banks have lent over 200 billion euros which will never be repaid.
Decisive action needs to be taken and the Italian government can no longer pretend the debts are confined to a small number of insignificant lenders. Many are calling for the government to create a “bad bank” where the non-performing loans can be separated from the rest of the system.
Europe can’t afford for the crisis to spread at a time when unemployment is stubbornly high, growth anaemic and inflation way below the ECBs 2% target.