Quiet crisis: why battle to prop up Italy's banks is vital to EU stability

Thrugelmir

A_Medium_Size_Jock wrote: »

Is this the beginning of "But you can't do that"?

As it's the EU there'll be some bending of the rules. As no one wants to give the peasants a reason to revolt. Politics comes first.

DiggerUK

When the end of finance as we know it finally happens, then we can worry. For now there are lots of players keeping the game going.

The details of how they are achieving this unbelievable fact are quite staggering, but still they keep the bubble bouncing around. I don't believe one bank, or even a handful, in a country or region going under, will be the end of history as we know it either.

Italy may be the weakest link that breaks and gets things rolling again, but for now 'let them eat panettone'..._

A_Medium_Size_Jock

It would seem that a 3.7 billion Euro bailout of three "small" Italian banks rescued in 2015 is near completion.
The European Comission has delayed progress by a week ..... just in case someone else wants to buy these banks, it seems.

The sale of Banca Etruria, Banca Marche and CariChieti to UBI, Italy’s fifth-largest lender, was expected to be finalised by the end of 2016. These three banks and a fourth, CariFerrara, were rescued from bankruptcy in 2015 but Italy is now struggling to find buyers for them after rejecting bids from private equity funds over the summer.

http://news.ofthe.eu/european-commission-delays-sale-of-small-italian-banks-to-ubi/

Presumably this is part of Italy's 20 billion Euro bank bailout fund?
But with 360 billion Euros of what the FT calls "problematic loans", how far will 20 billion Euros really go towards solving the problem?
Not far enough, I suspect.

cogito

Unicredit has recently announced losses of €13.5bn for last year. The bank optimistically said that if it hadn't been for writing off bad loans, it would have made a profit.

Well, that's all right then.

Thrugelmir

cogito wrote: »

Unicredit has recently announced losses of €13.5bn for last year. The bank optimistically said that if it hadn't been for writing off bad loans, it would have made a profit.

Well, that's all right then.

Underlying trading performance is key. Many companies hit a bad time. Tesco and Rolls Royce being good examples. Doesn't mean that the business is going under water. Throwing the kitchen sink in with the bad news is the best way for new management to take a business forward.

cogito

Thrugelmir wrote: »

Underlying trading performance is key. Many companies hit a bad time. Tesco and Rolls Royce being good examples. Doesn't mean that the business is going under water. Throwing the kitchen sink in with the bad news is the best way for new management to take a business forward.

Totally agree - if that's what they've done.

But it doesn't look as if they have as they still have about €27bn in bad and doubtful loans. At least they have managed to get their rights issue subscribed but at a 38% discount.