A renewed bout of distress among Greek and Italian banks illustrates a deeper problem in Europe: The financial system’s overseers haven’t done nearly enough to prepare for the next crisis. They should redouble their efforts before the window of opportunity closes.
The European economy may be doing relatively well, but you wouldn’t know it to look at the tanking share prices of Greek and Italian banks. The underlying issues are idiosyncratic: In Greece, a string of poor quarterly results and the country’s exit from its international rescue program have raised concerns about how banks will fare without official support; in Italy, the ruling coalition’s impossible fiscal promises have undermined confidence in the government’s financial viability. But there’s one theme in common: Investors don’t believe that the banks’ balance sheets are as strong as they need to be.
The full article is available at https://www.bloomberg.com/view/articles/2018-10-22/fragile-banks-in-italy-and-greece-suggest-trouble-for-europe