Italy’s Plan for Banks Could Roil Europe


The stock price of Banca Monte dei Paschi di Siena, one of Italy’s most troubled lenders, is down 80 percent in the last 12 months. CreditStefano Rellandini/Reuters

Even as Europe grapples with repercussions of Britain’s vote to leave the European Union, a dispute over tens of billions of dollars is also threatening to roil the region’s $16 trillion economy.

The Italian government, according to some estimates, needs to spend $45 billion to shore up its banks burdened with bad loans. Fears that European authorities will bar the government from providing that support are adding to the turbulence caused by “Brexit.”

It may seem difficult at first to understand how the lenders of a medium-size country, none of which are particularly large, or engage much in risky Wall Street activities, could be spreading fear through global financial markets…

Italy’s Plan for Banks Could Roil Europe

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