{"id":34578,"date":"2018-05-29T05:52:40","date_gmt":"2018-05-29T10:52:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34578"},"modified":"2018-05-29T05:52:40","modified_gmt":"2018-05-29T10:52:40","slug":"which-banks-are-most-exposed-to-italys-sovereign-debt-other-than-the-horribly-exposed-italian-banks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34578","title":{"rendered":"Which Banks Are Most Exposed to Italy\u2019s Sovereign Debt? (Other than the Horribly Exposed Italian Banks)"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/05\/27\/which-banks-are-most-exposed-to-italys-sovereign-debt-other-than-the-horribly-exposed-italian-banks\/\">Which Banks Are Most Exposed to Italy\u2019s Sovereign Debt? (Other than the Horribly Exposed Italian Banks)<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>\u201cDoom loop\u201d begins to exact its pound of flesh.<\/strong><\/p>\n<p>Risk. Exposure. Contagion. These are three words we\u2019re likely to hear more and more in relation to Europe, as the Eurozone\u2019s debt crisis returns.<\/p>\n<p>On Friday, Italy\u2019s 10-year risk premium \u2014 the spread between Italian ten-year bond yields and their German counterparts \u2014 surged almost 20 basis points to 212 basis points. This was the highest level since May 2017, when a number of Italy\u2019s banks, including third biggest bank\u00a0<span data-original-name=\"Banca Monte dei Paschi di Siena\">Monte dei Paschi\u00a0<\/span>di Siena (MPS), were on the brink of collapse and were either \u201cresolved\u201d or bailed out. Now, they\u2019re all beginning to wobble again.<\/p>\n<p>Shares of bailed-out and now majority-state-owned MPS, whose management the new government says it would like to change, are down 20% in the last two weeks\u2019 trading. The shares of Unicredit and Intesa, Italy\u2019s two biggest banks, have respectively shed 10% and 18% during the same period.<\/p>\n<p>One of the big questions investors are asking themselves is which banks are most exposed to Italian debt.<\/p>\n<p><span lang=\"EN-GB\">A recent study<\/span><span lang=\"EN-GB\"> by the <a href=\"https:\/\/www.bis.org\/bcbs\/publ\/d425.pdf\" target=\"_blank\" rel=\"noopener\">Bank for International Settlements<\/a> shows Italian government debt represents nearly 20% of Italian banks\u2019 assets \u2014 one of the highest levels in the world. In total there are ten banks with Italian sovereign-debt holdings that represent over 100% of their tier-1 capital (which is used to measure bank solvency), <a href=\"https:\/\/ftalphaville.ft.com\/2018\/03\/12\/1520868093000\/Bank-exposures-to-Italy--ranked\/\" target=\"_blank\" rel=\"noopener\">according to<\/a> research by Eric Dor, the director of Economic Studies at IESEG School of Management. <\/span><\/p>\n<p><span lang=\"EN-GB\">The list includes Italy\u2019s two largest lenders, Unicredit and Intesa Sanpaolo, whose exposure to Italian government bonds represent the equivalent of 145% of their tier-1 capital. <\/span><span lang=\"EN-GB\">Also listed are Italy\u2019s third largest bank, Banco BPM (327%), Monte dei Paschi di Siena (206%), BPER Banca (176%) and Banca Carige (151%).<\/span><\/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>Which Banks Are Most Exposed to Italy\u2019s Sovereign Debt? (Other than the Horribly Exposed Italian Banks) \u201cDoom loop\u201d begins to exact its pound of flesh. Risk. Exposure. Contagion. These are three words we\u2019re likely to hear more and more in relation to Europe, as the Eurozone\u2019s debt crisis returns. On Friday, Italy\u2019s 10-year risk premium [&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":[63,5660,1464,741,4255],"class_list":["post-34578","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-don-quijones","tag-italy","tag-sovereign-debt","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34578","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=34578"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34578\/revisions"}],"predecessor-version":[{"id":34579,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34578\/revisions\/34579"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}