Italian banks face double challenge
A spike in Italy’s bond yields has put the country’s banks under renewed pressure
Domestic government bonds account for 10 percent of Italian banks’ total assets, making them vulnerable to a rise in Rome’s debt costs under the anti-austerity government.
Caught in the bank-sovereign “doom loop,” Italian banks replaced fleeing foreign investors during the euro zone debt crisis of 2011-2012, buying up Italy’s bonds. They similarly stepped up purchases of domestic debt in May and June during a market sell-off of Italian assets, before lowering them in August as prices steadied.
Published: by Radio NewsHub