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Italian Banks Does Not Sound Good

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Yes I was shocked to hear this just briefly mentioned this morning on the radio, by saying Italian banks had £20billion of debts, but the EU only had £40 billion available for them!

I wonder how the rest of the banks in the EU are fairing?

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F00kin hell, the third largest bank in Italy!! Italy does seem to be going through a period of a bank going bust every few weeks, but until now I assumed they were relative tiddler's

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F00kin hell, the third largest bank in Italy!! Italy does seem to be going through a period of a bank going bust every few weeks, but until now I assumed they were relative tiddler's

All Italian banks are relative tiddlers compared to ours. They don't have anything like a "big five", or however many it is these days.

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F00kin hell, the third largest bank in Italy!! Italy does seem to be going through a period of a bank going bust every few weeks, but until now I assumed they were relative tiddler's

All Italian banks are relative tiddlers compared to ours. They don't have anything like a "big five", or however many it is these days.

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All Italian banks are relative tiddlers compared to ours. They don't have anything like a "big five", or however many it is these days.

Depending upon your perspective, maybe that's something we should learn from. A bank with €50bn in non-performing loans is a lot easier to deal with than banks with £500bn derivative liabilities *

*Number plucked from the air, not a veiled reference to any particular organisation, just representative of the difference in scale. DYOR

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Yes I was shocked to hear this just briefly mentioned this morning on the radio, by saying Italian banks had £20billion of debts, but the EU only had £40 billion available for them!

I wonder how the rest of the banks in the EU are fairing?

These numbers don't make any sense. You probably heard 'bad debt' rather than debt. Debt is no problem for banks until it can't be serviced.

And you probably missed by an order or magnitude. £20bn bad debt is a lot but not a major concern.

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If 'they' say that the debts are 20 billion, the actual figure is probably more than double that. I guarantee it.

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If 'they' say that the debts are 20 billion, the actual figure is probably more than double that. I guarantee it.

For the Italian banks in aggregate the bad debts make up about $500 billion.

There are those that think that there will be a Cyprus style resolution at some point (and, supposedly, soon). I'm not so sure, but I'd rather not have any money in those banks in the meantime.

[Apparently, the overall estimated haircut is about 15-20%, but that would be shared unequally amongst shareholders, bondholders and depositors (protected under 100,000 euro) and central supporting funds. Estimate 8% (EU limit) haircut for depositors and bondholders. Don't see why shareholders wouldn't be wiped out entirely.]

[Deutsche is a different thing entirely. I don't know what they're going to do there - but it would blow up the sector is allowed to fail in an uncontrolled fashion. Still, the wonderful EU doesn't really have a legal mechanism to save it. I think they'll save it and then worry about the legalities later]

Edited by dgul

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For the Italian banks in aggregate the bad debts make up about $500 billion.

There are those that think that there will be a Cyprus style resolution at some point (and, supposedly, soon). I'm not so sure, but I'd rather not have any money in those banks in the meantime.

[Apparently, the overall estimated haircut is about 15-20%, but that would be shared unequally amongst shareholders, bondholders and depositors (protected under 100,000 euro) and central supporting funds. Estimate 8% (EU limit) haircut for depositors and bondholders. Don't see why shareholders wouldn't be wiped out entirely.]

[Deutsche is a different thing entirely. I don't know what they're going to do there - but it would blow up the sector is allowed to fail in an uncontrolled fashion. Still, the wonderful EU doesn't really have a legal mechanism to save it. I think they'll save it and then worry about the legalities later]

$500bn bad debt that's more like it to hit the news.

Interesting article here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/12014901/Europes-banks-still-weighed-down-by-1-trillion-of-bad-debts.html

If the numbers are correct then Italy has roughly half all bad debt in Europe.

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Surely Deutsche bank is going to do a Lehmann at some point.

I expect UK banks to need refinancing in the next couple of years as well, there's going to be a lot of delinquent loans.

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If 'they' say that the debts are 20 billion, the actual figure is probably more than double that. I guarantee it.

Absolutely, I remember the UBS bad debt that just kept ballooning and ballooning once they finally admitted they had a problem.

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There's an article on FT yesterday about the Italian banks. Summary is vulnerable loan at about 360bn, a fifth of GDP.

Italian banks haven't done the necessary restructuring, draw a line between good and bad assets like US, UK, Ireland etc. instead just brush the problems under the carpet.

County has way too many banks, allegedly there are more bank branches than pizzeria. To make this fit for purpose tens of thousands of jobs need to go and branches to be closed.

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There's an article on FT yesterday about the Italian banks. Summary is vulnerable loan at about 360bn, a fifth of GDP.

Italian banks haven't done the necessary restructuring, draw a line between good and bad assets like US, UK, Ireland etc. instead just brush the problems under the carpet.

County has way too many banks, allegedly there are more bank branches than pizzeria. To make this fit for purpose tens of thousands of jobs need to go and branches to be closed.

Combine the two?

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