Atlantico: According to data provided by ISTAT, Italy would once again enter recession, due to the publication of two consecutive quarterly GDP contraction figures, of which -0.2% for the fourth quarter of 2018. In such a context, and then that the Italian banking sector is regularly pointed out, what are the risks of seeing the Italian situation deteriorate, and lead the euro area with it?
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Frederic Farah: The Italian banking sector is at the heart of the storm, and raises many concerns. It is important to keep in mind some ideas to measure the extent of the difficulties of the moment. "Data-reactid =" 12 ">Frederic Farah: The Italian banking sector is at the heart of the storm, and raises many concerns. It is important to keep in mind some ideas to measure the extent of the difficulties of the moment.
The Italian banking sector is fragile not because of an abuse of dangerous or overly speculative practices, but because of the economic and financial consequences of the subprime crisis. Between 2010 and 2012, the financial markets fueled the fear that Italy will default on its public debt. The Italian public debt is very largely owned by the Italian banks themselves. The financial markets at that time demanded very high interest rates from the Italian state and the Italian banks. The latter passed on some of this extra cost to households and businesses. The financing of the Italian economy is largely based on bank credit. This situation has led to a rise in credit, and a phenomenon known as tightening of credit (creditcrunch).
Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" GDP has been collapsing since the crisis 2011 sovereign debt of more than 10% and a drop in industrial production of 25% .The fabric of Italian SMEs is suffering and has seen the bankruptcies multiply.Thus, the capacity of households or Since the banks' situation has worsened, with the growth of non-performing loans, in 2015, at the worst of the situation, 1 out of 5 loans was non-performing. .)read more on Atlantico
"data-reactid =" 14 "> The GDP then experienced a collapse since the 2011 sovereign debt crisis, by more than 10% and a drop in industrial production of 25%. As a result, the capacity of households or businesses to repay loans has been seriously deteriorated, and as a result the situation of banks has worsened with the growth of non-performing loans. at the worst of the situation, 1 out of 5 loans was non-performing.read more on Atlantico