Italy’s prime minister Matteo Renzi and the well-being of many Italian households are at a risk with what could happen to Monte dei Paschi (MPS) which is the world’s oldest bank. MPS is currently facing a crisis that has left financial markets anxious. Co-president of Teneo Intelligence, Teneo Intelligence has stated that there may be a third bailout of the MPS.
According to IMF, non-performing loans worth €360bn (£300bn) have bothered Italian banks which were mainly taken out by small Italian businesses damaged by continuing recession. It was suggested that the country’s GDP may not return to pre-crisis levels prior to 2020. The bank is in a predicament because it gave billion worth of euros in loans to the small businesses when recession was underestimated.
The downfall of shares from Monte dei Paschi along with the aftermath of Brexit is said to fail the vital bank stress test by July 29. Banks require a bailout of almost €45bn which experts suggest cannot be gained by investors.
The material has been provided by InstaForex Company – www.instaforex.com