Another case of hubris?

15 October 2008 By Rachel Sanderson

Berlusconi’s confidence in Italy’s banking system was too enthusiastic. Intesa Sanpaolo and Monte dei Paschi are low in the European league. Unicredit is only middle of the pack. With Italy in recession and the Brits, Swiss and Dutch raising more capital, they look exposed.

This content is for Subscribers only

Context News

Silvio Berlusconi, the Italian prime minister, said on October 8 problems in Italy's banking sector were fixed. His comments came after Unicredit, Italy's second largest banking group, announced plans to raise E6.6bn and cut 1,000 jobs in investment banking in 2009.

Unicredit's Core Tier 1 ratio will rise to 6.7% from 5.7% after its capital raising. Intesa Sanpaolo is expected to have a Core Tier 1 ratio of 6.0% by the end of the year, while Monte dei Paschi di Siena will have a Core Tier 1 of 5.9%.

The Italian economy is in recession and won't grow this year or next, according to a Reuters poll of economists. Unadjusted industrial order fell 11% in August on a yearonyear basis, the steepest fall since 199, data from the national statistics office showed on October 17.

Email a friend

Please complete the form below.

Required fields *