{"id":23385,"date":"2017-03-31T10:58:07","date_gmt":"2017-03-31T15:58:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23385"},"modified":"2017-03-31T10:58:07","modified_gmt":"2017-03-31T15:58:07","slug":"heres-why-italys-banking-crisis-has-gone-off-the-radar","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23385","title":{"rendered":"Here\u2019s Why Italy\u2019s Banking Crisis Has Gone Off the Radar"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2017\/03\/30\/how-many-italian-banks-are-insolvent\/\">Here\u2019s Why Italy\u2019s Banking Crisis Has Gone Off the Radar<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Just how many banks are insolvent? Turns out, a lot! But elections are coming up.<\/strong><\/p>\n<p>For a country that is on the brink of a gargantuan public bailout of its toxic-loan riddled banking sector, or failing that, a full-blown financial crisis that could bring down the European financial system, things are eerily quiet in Italy these days. It\u2019s almost as if the more serious the crisis gets, the less we hear about it \u2014 otherwise, investors and voters might get spooked. And elections are coming up.<\/p>\n<p>But an\u00a0<a href=\"http:\/\/www.ilsole24ore.com\/art\/finanza-e-mercati\/2017-03-24\/quelle-114-banche-che-hanno-sofferenze-e-incagli-che-superano-capitale--201607.shtml?uuid=AE6qY5s&amp;refresh_ce=1\" target=\"_blank\">article<\/a> published in the financial section of Italian daily Il Sole lays out just how serious the situation has become. According to new research by Italian investment bank Mediobanca, 114 of the close to 500 banks in Italy have \u201cTexas Ratios\u201d of over 100%. The Texas Ratio, or TR, is calculated by dividing the total value of a bank\u2019s non-performing loans by its tangible book value plus reserves \u2014 or as American money manager Steve Eisman put it, \u201call the bad stuff divided by the money you have to pay for all the bad stuff.\u201d<\/p>\n<p>If the TR is over 100%, the bank doesn\u2019t have enough money \u201cpay for all the bad stuff.\u201d Hence, banks tend to fail when the ratio surpasses 100%. In Italy there are 114 of them. Of them, 24 have ratios of over 200%.<\/p>\n<p>Granted, many of the banks in question are small local or regional savings banks with tens or hundreds of millions of euros in assets. These are not systemically important institutions and can be resolved without causing disturbances to the broader system. But the list also includes many of Italy\u2019s biggest banks which certainly are systemically important to Italy, some of which have Texas Ratios of over 200%. Top of the list, predictably, is Monte dei Paschi di Siena, with \u20ac169 billion in assets and a TR of 269%.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Here\u2019s Why Italy\u2019s Banking Crisis Has Gone Off the Radar Just how many banks are insolvent? Turns out, a lot! But elections are coming up. For a country that is on the brink of a gargantuan public bailout of its toxic-loan riddled banking sector, or failing that, a full-blown financial crisis that could bring down [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,5660,281,13325,1464,15046,4255],"class_list":["post-23385","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-don-quijones","tag-europe","tag-italian-banking-crisis","tag-italy","tag-texas-ratio","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23385"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23385\/revisions"}],"predecessor-version":[{"id":23386,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23385\/revisions\/23386"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}