EURO ON THE BRINK: Investors predict currency COLLAPSE as Italy ‘worry child number one’

Tuesday, December 27, 2016
By Paul Martin

ONE in five investors is predicting a Eurozone breakup, a survey has revealed, amid fresh fears Italian banks could be first to be allowed to go bust.

Tue, Dec 27, 2016

According to the latest Sentix Euro Break-up Index data captured just before Christmas, 21.8 per cent of 933 investors questioned believe Italy could end up leaving the Eurozone as its banks struggle with a liquidity crisis.

Sentix CEO Manfred Hübner said: “Italy remains the euro-worry child number one, even before Greece.”

Last week new Italian Prime Minister New Paolo Gentiloni approved £17bn in public funds to help stabilise his country’s most fragile financial institutions.

The crisis began to show cracks of earthquake proportions when the European Central Bank announced the results of the 2016 bank stress tests on July 29.

They identified Italian banks as being £307bn in the red thanks to bad loans which make up 18 per cent of total bank balance sheets. Also causing concern is their chronically poor profitability, record-low interest rates, thin capital buffers and high costs.

Since July the ECB has repeatedly dragged its heels in offering a bail out.

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