More dangerous than Brexit: Italy's economic crisis

[KediKesenFare3]

Italy’s ‘zombie banks’ could trigger Euro crisis

Investors are braced for another bout of turbulence on global markets ahead of the release of special reports on the financial health of Italy’s ailing banking sector.

On Friday evening (AEST), the European Banking Authority will publish the findings of its financial stress-testing of 50 banks in the European Union, including Italy’s five largest banks that account for more than 80 per cent of lending in the country.

The results are almost certain to confirm that one or more of Italy’s leading banks are on the brink of collapse, and could trigger another bailout crisis for the European Union.

Italy’s economy is barely recovering from a five-year depression that has put more than one-third of young adults on the dole, and severely stretched households and small businesses to meet loan repayments.


Italian banks are sitting on $529 billion in loan assets that borrowers have stopped repaying. Photo: Getty
The depth of the crisis in Italy is represented on the balance sheets of the country’s big banks, which are collectively sitting on €360 billion ($A529 billion) of loan assets that borrowers have stopped repaying.

Most bank analysts are now coming to terms with the fact that the great bulk of these loans will never be repaid because the borrowers, in most cases, have been declared insolvent.

The world’s oldest bank may now be a ‘zombie’
At the centre of Italy’s banking crisis is the world’s oldest surviving bank – Banca Monte dei Paschi di Siena (BMPS).

Some investors are now suggesting that BMPS may be Europe’s next ‘zombie bank’.

This term “zombie’ is used to describe a bank which in economic terms is worthless but continues to trade because it has an implicit government guarantee.

Founded in 1472, BMPS is Italy’s third-largest commercial bank with alleged assets of €160 billion.


For many years Italian banks have not written off loans made to insolvent borrowers. Photo: Getty
It is a cornerstone of the Italian banking system and is recognised by European regulators as “a systemically important” institution.

Like most other Italian banks, shares of BMPS have been pummelled this year as it became increasingly clear that it would be forced by regulators to write off billions worth of loans.

For many years, BMPS and other Italian banks have not written off loans made to insolvent borrowers because it would have required them to raise more capital to satisfy regulators.

Banks raise capital by selling assets or issuing more shares to investors.

However, this is now problematic for even longstanding companies such as BMPS because demand for Italian banking-related assets and shares has dried up.

Why Friday is important
When it last released a balance sheet, BMPS reported that around €46 billion of its loans were non-performing.

This means that more than one quarter of all of its loans were not being repaid by borrowers.

In June, the European Central Bank warned BMPS that its trading position would become untenable unless it moved swiftly to move bad loans from its balance sheet.

In recent weeks, demand from other banks and investors for troubled loan portfolios has withered and BMPS’s share price has tanked.

The bank is now in big trouble and desperately needs to find more cash to maintain the confidence of European regulators.

Most of the financial world knows it can’t raise money using the orthodox methods of stable banks.

So, it’s now crunch time – for Italian and European taxpayers.

Publication of the regulatory stress-testing of BMPS and other troubled Italian banks should reveal whether Europe has another bailout emergency to deal with.
http://thenewdaily.com.au/money/finance-news/2016/07/28/italys-zombie-banks-euro-crisis/

The situation in Italy and Europe is like a never-ending story of economic mistakes.

 

[KediKesenFare3]

Italy won't see pre-crisis growth until mid-2020s: IMF
Holly Ellyatt | @HollyEllyatt
Monday, 11 Jul 2016 | 6:00 PM ETCNBC.com
Italy is in for a slow economic recovery and will not reach pre-crisis growth levels until the mid-2020s, the International Monetary Fund (IMF) warned in its latest annual report on the country on Monday.

The euro zone's third-largest economy is gradually recovering after a protracted recession, but a number of structural challenges "remain significant," the IMF said.

"Productivity and investment growth are low; the unemployment rate remains above 11 percent, with considerably higher levels in some regions and among the youth; bank balance sheets are strained by very high NPLs (non-performing loans) and lengthy judicial processes; and public debt has edged up to close to 133 percent of GDP (gross domestic product), a level that limits the fiscal space to respond to shocks," it said in its report.
(...)
http://www.cnbc.com/2016/07/11/italy-wont-see-pre-crisis-growth-until-mid-2020s-imf.html

 

[ebrahym]

Italy’s ‘zombie banks’ could trigger Euro crisis

Investors are braced for another bout of turbulence on global markets ahead of the release of special reports on the financial health of Italy’s ailing banking sector.

On Friday evening (AEST), the European Banking Authority will publish the findings of its financial stress-testing of 50 banks in the European Union, including Italy’s five largest banks that account for more than 80 per cent of lending in the country.

The results are almost certain to confirm that one or more of Italy’s leading banks are on the brink of collapse, and could trigger another bailout crisis for the European Union.

Italy’s economy is barely recovering from a five-year depression that has put more than one-third of young adults on the dole, and severely stretched households and small businesses to meet loan repayments.


Italian banks are sitting on $529 billion in loan assets that borrowers have stopped repaying. Photo: Getty
The depth of the crisis in Italy is represented on the balance sheets of the country’s big banks, which are collectively sitting on €360 billion ($A529 billion) of loan assets that borrowers have stopped repaying.

Most bank analysts are now coming to terms with the fact that the great bulk of these loans will never be repaid because the borrowers, in most cases, have been declared insolvent.

The world’s oldest bank may now be a ‘zombie’
At the centre of Italy’s banking crisis is the world’s oldest surviving bank – Banca Monte dei Paschi di Siena (BMPS).

Some investors are now suggesting that BMPS may be Europe’s next ‘zombie bank’.

This term “zombie’ is used to describe a bank which in economic terms is worthless but continues to trade because it has an implicit government guarantee.

Founded in 1472, BMPS is Italy’s third-largest commercial bank with alleged assets of €160 billion.


For many years Italian banks have not written off loans made to insolvent borrowers. Photo: Getty
It is a cornerstone of the Italian banking system and is recognised by European regulators as “a systemically important” institution.

Like most other Italian banks, shares of BMPS have been pummelled this year as it became increasingly clear that it would be forced by regulators to write off billions worth of loans.

For many years, BMPS and other Italian banks have not written off loans made to insolvent borrowers because it would have required them to raise more capital to satisfy regulators.

Banks raise capital by selling assets or issuing more shares to investors.

However, this is now problematic for even longstanding companies such as BMPS because demand for Italian banking-related assets and shares has dried up.

Why Friday is important
When it last released a balance sheet, BMPS reported that around €46 billion of its loans were non-performing.

This means that more than one quarter of all of its loans were not being repaid by borrowers.

In June, the European Central Bank warned BMPS that its trading position would become untenable unless it moved swiftly to move bad loans from its balance sheet.

In recent weeks, demand from other banks and investors for troubled loan portfolios has withered and BMPS’s share price has tanked.

The bank is now in big trouble and desperately needs to find more cash to maintain the confidence of European regulators.

Most of the financial world knows it can’t raise money using the orthodox methods of stable banks.

So, it’s now crunch time – for Italian and European taxpayers.

Publication of the regulatory stress-testing of BMPS and other troubled Italian banks should reveal whether Europe has another bailout emergency to deal with.
http://thenewdaily.com.au/money/finance-news/2016/07/28/italys-zombie-banks-euro-crisis/

The situation in Italy and Europe is like a never-ending story of economic mistakes.

Italy is more dangerous than Brexit: Europe’s next crisis could be systemic
@waz @Emmie

 

[UKBengali]

@MarkusS :

Sorry to say this but I was right about the poor state of the Italian economy.

 

[KediKesenFare3]

@MarkusS :

Sorry to say this but I was right about the poor state of the Italian economy.

Indeed, you were right, look at this mess:

Italy is more dangerous than Brexit: Europe’s next crisis could be systemic
@waz @Emmie

Thanks, but my thread is in the right section.

 

[ebrahym]

Thanks, but my thread is in the right section.

no i was asking them to merg both threads ............. its easier to search for this way

 

[MarkusS]

@MarkusS :

Sorry to say this but I was right about the poor state of the Italian economy.

and?

we had worse times in the past. We are one of the richest nations on this planet. One of the most beautiful.

All this is just paper money. A game. What is real value? Those accounts certainly aren´t.

So if you believed you could pull me down i must disappoint you. I´m happy, because i bought my girlfriend a gift and want to give it to her tomorrow. Thats what matters and nothing else.

 

[dadeechi]

and?

we had worse times in the past. We are one of the richest nations on this planet. One of the most beautiful.

All this is just paper money. A game. What is real value? Those accounts certainly aren´t.

So if you believed you could pull me down i must disappoint you. I´m happy, because i bought my girlfriend a gift and want to give it to her tomorrow. Thats what matters and nothing else.

How about Italy accepting more refugees in return for bailout package from EU.

German Chancellor Angela Merkel Stands Firm on Migrant Policy After Terrorist Attacks
The spate of violence has prompted criticism over her refusal to close country’s borders

ENLARGE
German Chancellor Angela Merkel delivers remarks during a press briefing on domestic and foreign policy issues in Berlin on Thursday. Photo: European Pressphoto Agency
By
Anton Troianovski and

• 
  Anton Troianovski
  The Wall Street Journal
  
• BERLIN—German Chancellor Angela Merkel said she wouldn’t budge from her policy of accepting refugees despite two terror attacks by asylum applicants in the space of a week.
  
  Ms. Merkel, interrupting her vacation on Thursday to hold a news conference in Berlin, repeated her “We can do it” mantra from last August, when thousands of migrants seeking asylum were entering Germany daily.
  
  That conviction, she said, also applied to the challenge of terrorism. While she presented a nine-point plan to address that risk, she insisted that Germany would continue to shelter people fleeing violence.
  
  “For me it is clear: we will stick to our fundamental principles,” Ms. Merkel said, quoting the guarantee that “human dignity shall be inviolable” in Germany’s constitution. “These principles mean we will give asylum to those who are politically persecuted and we will give protection to those who flee war and expulsion according to the Geneva Refugee Convention.”
  
  
  
  Ms. Merkel’s comments were her first after a suicide bombing in southern Germany on Sunday that capped a week of violence that rattled this country’s sense of security. The bombing in the town of Ansbach, which injured 15, and an ax attack earlier last week that injured five, were both carried out by asylum applicants who were apparently followers of radical Islam.
  
  A Barrage of Violence in Europe
  
  Special force police officers arrive at the Olympia shopping center in Munich where nine people were killed and 35 injured after a lone gunman opened fire earlier in July. Michael Trammer/Zuma Press
  
  The bombings have thrown a harsh light on the security implications of Ms. Merkel’s refusal to close Germany’s border as more than a million migrants entered the country since the beginning of last year. The chancellor also drew criticism for maintaining a public silence for days in the wake of the Ansbach bombing, which was the first Islamist suicide attack in Germany’s history.
  
  Ms. Merkel said she understood Germans’ fears and promised an array of measures, including speedier deportations for people who aren’t granted asylum, more equipment and personnel for security agencies, and stepped-up efforts to detect Islamist radicals during the asylum application process. She also called on Muslim community leaders to more clearly reject terrorism.
  
  But she warned against an overreaction, even as politicians to her right renewed their criticism of her refugee policy.
  
  
  
  ENLARGE
  “Fear cannot be the guide for political action,” Ms. Merkel said. “We cannot and need not allow our way of life to be broken by such people who have no goal but to scare us and to destroy our cohesion.”
  
  The anti-immigrant Alternative for Germany party, which has scored electoral successes amid public discontent with Ms. Merkel’s acceptance of refugees, quickly slammed the chancellor’s response.
  
  “Even now after the gruesome attacks, when it should be clear for everyone that open borders bring us the greatest terror risk, Merkel is sticking to her failed course,” Alternative for Germany Deputy Chairman Alexander Gauland said. “‘We can do it’ must sound like mockery to the many victims of the numerous attacks.”
  
  It remains unclear whether Ms. Merkel will pay a political price for the attacks, which she called “shocking, aggrieving, and also depressing.” The number of asylum seekers arriving in Germany has dropped sharply in recent months, to 16,335 registered new arrivals in June from a record 206,101 in November.
  
  
  German police and investigators found bomb-making materials and a video declaring allegiance to Islamic State in the apartment of the Ansbach suicide bomber. Residents in the apartment block described what the 27-year-old Syrian was like. Photo: Getty Images
  She renewed her promise on Thursday that a wave of mass migration as seen last year wouldn’t repeat itself, in part because of a European Union agreement with Turkey to limit the flow of people.
  
  But new signs of tension within Ms. Merkel’s government emerged Thursday as leaders in the state of Bavaria, where the two Islamist attacks took place, called for arriving migrants who couldn’t identify themselves to be detained or turned back at the border.
  
  Bavaria’s ruling Christian Social Union is a governing partner in Ms. Merkel’s coalition on the federal level but has called for months for limits on the number of asylum seekers Germany takes in.
  
  Ms. Merkel has resisted those steps, both for humanitarian reasons and because she fears risking a cherished policy of free travel between borders in much of Europe.
  
  “There can be no more uncontrolled entry,” said Bavarian Interior Minister Joachim Herrmann. “We need security, transparency and law and order in the refugee process in Germany.”
  
  Mr. Herrmann said the state would add 2,000 new police forces over the next four years, buy new equipment, and push for broader powers for law enforcement and intelligence. He also called for stricter border controls, speedier deportations, and additional background checks for some of the migrants already in the country.
  
  “Only social romantics can assume that it’s enough to react now with more psychologists and more help,” Bavarian Justice Minister Winfried Bausback said.
  
  Separately, some 400 police officers in the northern state of Lower Saxony late on Wednesday raided a mosque they suspected of encouraging believers to join Islamic State. Officials said the raid had been prepared for months, had no link to the recent attacks, and aimed to seize material that could support a possible ban of the religious association. Investigators are now combing through laptops, phones and other documents that were found.
  
  The state’s Interior Ministry said the religious association, called German-Speaking Islam Circle Hildesheim, had become a focal point for followers across Germany of the fundamentalist Salafi branch of Islam. The ministry said it had proof that many of its attendees had traveled to Iraq or Syria, including some to join Islamic State. In sermons, seminars and speeches, the association has called for “hatred against nonbelievers,” the ministry said.
  
  “We won’t tolerate that Salafi associations and their backers ignore our rules, even question the constitutional order and try to convince young people to join the self-proclaimed Islamic State,” Lower Saxony Interior Minister Boris Pistorius said in a statement.
  
  The homes of eight of its organizers were also searched on Wednesday, the ministry said. No one was arrested
  
  
  http://www.wsj.com/articles/bavaria...tougher-measures-on-asylum-seekers-1469699655

 

[MarkusS]

How about Italy accepting more refugees in return for bailout package from EU.

German Chancellor Angela Merkel Stands Firm on Migrant Policy After Terrorist Attacks
The spate of violence has prompted criticism over her refusal to close country’s borders

ENLARGE
German Chancellor Angela Merkel delivers remarks during a press briefing on domestic and foreign policy issues in Berlin on Thursday. Photo: European Pressphoto Agency
By
Anton Troianovski and

• 
  Anton Troianovski
  The Wall Street Journal
  
• BERLIN—German Chancellor Angela Merkel said she wouldn’t budge from her policy of accepting refugees despite two terror attacks by asylum applicants in the space of a week.
  
  Ms. Merkel, interrupting her vacation on Thursday to hold a news conference in Berlin, repeated her “We can do it” mantra from last August, when thousands of migrants seeking asylum were entering Germany daily.
  
  That conviction, she said, also applied to the challenge of terrorism. While she presented a nine-point plan to address that risk, she insisted that Germany would continue to shelter people fleeing violence.
  
  “For me it is clear: we will stick to our fundamental principles,” Ms. Merkel said, quoting the guarantee that “human dignity shall be inviolable” in Germany’s constitution. “These principles mean we will give asylum to those who are politically persecuted and we will give protection to those who flee war and expulsion according to the Geneva Refugee Convention.”
  
  
  
  Ms. Merkel’s comments were her first after a suicide bombing in southern Germany on Sunday that capped a week of violence that rattled this country’s sense of security. The bombing in the town of Ansbach, which injured 15, and an ax attack earlier last week that injured five, were both carried out by asylum applicants who were apparently followers of radical Islam.
  
  A Barrage of Violence in Europe
  
  Special force police officers arrive at the Olympia shopping center in Munich where nine people were killed and 35 injured after a lone gunman opened fire earlier in July. Michael Trammer/Zuma Press
  
  The bombings have thrown a harsh light on the security implications of Ms. Merkel’s refusal to close Germany’s border as more than a million migrants entered the country since the beginning of last year. The chancellor also drew criticism for maintaining a public silence for days in the wake of the Ansbach bombing, which was the first Islamist suicide attack in Germany’s history.
  
  Ms. Merkel said she understood Germans’ fears and promised an array of measures, including speedier deportations for people who aren’t granted asylum, more equipment and personnel for security agencies, and stepped-up efforts to detect Islamist radicals during the asylum application process. She also called on Muslim community leaders to more clearly reject terrorism.
  
  But she warned against an overreaction, even as politicians to her right renewed their criticism of her refugee policy.
  
  
  
  ENLARGE
  “Fear cannot be the guide for political action,” Ms. Merkel said. “We cannot and need not allow our way of life to be broken by such people who have no goal but to scare us and to destroy our cohesion.”
  
  The anti-immigrant Alternative for Germany party, which has scored electoral successes amid public discontent with Ms. Merkel’s acceptance of refugees, quickly slammed the chancellor’s response.
  
  “Even now after the gruesome attacks, when it should be clear for everyone that open borders bring us the greatest terror risk, Merkel is sticking to her failed course,” Alternative for Germany Deputy Chairman Alexander Gauland said. “‘We can do it’ must sound like mockery to the many victims of the numerous attacks.”
  
  It remains unclear whether Ms. Merkel will pay a political price for the attacks, which she called “shocking, aggrieving, and also depressing.” The number of asylum seekers arriving in Germany has dropped sharply in recent months, to 16,335 registered new arrivals in June from a record 206,101 in November.
  
  
  German police and investigators found bomb-making materials and a video declaring allegiance to Islamic State in the apartment of the Ansbach suicide bomber. Residents in the apartment block described what the 27-year-old Syrian was like. Photo: Getty Images
  She renewed her promise on Thursday that a wave of mass migration as seen last year wouldn’t repeat itself, in part because of a European Union agreement with Turkey to limit the flow of people.
  
  But new signs of tension within Ms. Merkel’s government emerged Thursday as leaders in the state of Bavaria, where the two Islamist attacks took place, called for arriving migrants who couldn’t identify themselves to be detained or turned back at the border.
  
  Bavaria’s ruling Christian Social Union is a governing partner in Ms. Merkel’s coalition on the federal level but has called for months for limits on the number of asylum seekers Germany takes in.
  
  Ms. Merkel has resisted those steps, both for humanitarian reasons and because she fears risking a cherished policy of free travel between borders in much of Europe.
  
  “There can be no more uncontrolled entry,” said Bavarian Interior Minister Joachim Herrmann. “We need security, transparency and law and order in the refugee process in Germany.”
  
  Mr. Herrmann said the state would add 2,000 new police forces over the next four years, buy new equipment, and push for broader powers for law enforcement and intelligence. He also called for stricter border controls, speedier deportations, and additional background checks for some of the migrants already in the country.
  
  “Only social romantics can assume that it’s enough to react now with more psychologists and more help,” Bavarian Justice Minister Winfried Bausback said.
  
  Separately, some 400 police officers in the northern state of Lower Saxony late on Wednesday raided a mosque they suspected of encouraging believers to join Islamic State. Officials said the raid had been prepared for months, had no link to the recent attacks, and aimed to seize material that could support a possible ban of the religious association. Investigators are now combing through laptops, phones and other documents that were found.
  
  The state’s Interior Ministry said the religious association, called German-Speaking Islam Circle Hildesheim, had become a focal point for followers across Germany of the fundamentalist Salafi branch of Islam. The ministry said it had proof that many of its attendees had traveled to Iraq or Syria, including some to join Islamic State. In sermons, seminars and speeches, the association has called for “hatred against nonbelievers,” the ministry said.
  
  “We won’t tolerate that Salafi associations and their backers ignore our rules, even question the constitutional order and try to convince young people to join the self-proclaimed Islamic State,” Lower Saxony Interior Minister Boris Pistorius said in a statement.
  
  The homes of eight of its organizers were also searched on Wednesday, the ministry said. No one was arrested
  
  
  http://www.wsj.com/articles/bavaria...tougher-measures-on-asylum-seekers-1469699655

lol. thats like saying:

hey do you want change your flu for ebola?

Sorry but no.

 

[livingdead]

lol. thats like saying:

hey do you want change your flu for ebola?

Sorry but no.

well, you got many islands... think of the offer...

 

[UKBengali]

and?

we had worse times in the past. We are one of the richest nations on this planet. One of the most beautiful.

All this is just paper money. A game. What is real value? Those accounts certainly aren´t.

So if you believed you could pull me down i must disappoint you. I´m happy, because i bought my girlfriend a gift and want to give it to her tomorrow. Thats what matters and nothing else.

When was that dude? In the old colonial times when you could loot your way to riches?

This is the modern world we are talking about and Italy simply is not able to cut it to stay rich for much longer.

 

[MarkusS]

well, you got many islands... think of the offer...

no, i would rather cut my hands off than giving one of our islands to those savages.

When was that dude? In the old colonial times when you could loot your way to riches?

This is the modern world we are talking about and Italy simply is not able to cut it to stay rich for much longer.

how so? will out beautiful lakes. tuscany, olives, art and beauty disappear because a misbalance of non existing computer money?

You dont know italian history do you? We went more often bancrupt than Lindsay Lohan.

But you are right. We live in the modern world now. Evrything is connected. If we go bancrupt others will follow. Italy is one of the worlds largest economies. So i expect that your government will use your tax money to help us out.

 

[UKBengali]

how so? will out beautiful lakes. tuscany, olives, art and beauty disappear because a misbalance of non existing computer money?

You dont know italian history do you? We went more often bancrupt than Lindsay Lohan.

Italy won't become 3rd world for sure but it will join the ranks of middle-income countries over the next 15-20 years.

Italian society is unable to adapt to the new world where economic centres of gravity are distributed to more places of the world than before.

 

[MarkusS]

Italy won't become 3rd world for sure but it will join the ranks of middle-income countries over the next 15-20 years.

Italian society is unable to adapt to the new world where economic centres of gravity are distributed to more places of the world than before.

i dont care. I have other more important issues.

1. plan to engage with my girl

2. plan my next holiday

3. plan my off season for my next bodybuilding competition

 

[KediKesenFare3]

i dont care. I have other more important issues.

1. plan to engage with my girl

2. plan my next holiday

3. plan my off season for my next bodybuilding competition

Wow, what a sudden change of mind, huh? ;-)


Spain and Portugal, two problem children in the eurozone, have improved economically over the last couple years. Italy, in contrast, continues to labor with structural imbalances. A telling statistic is that since the creation of the euro currency 16 years ago, it has grown only 4% in total.
http://www.investopedia.com/articles/investing/123015/3-economic-challenges-italy-faces-2016.asp

That's incredible bad for a country like Italy. Are you planning to go back to Germany?