Since the global financial crisis in 2008 there has been numerous banking reforms to help clean up the banking sector calamity. A combination of banking factors like subprime lending, mountainous debt, property bubbles and poor regulation contributed to the recent economical downfall. The reckless lending approach is still a major worry for the European Central Bank. Economists are still concerned over weak banks, bad loans and high debt levels.
Despite the ECB best efforts, lowering interest rates, guarantees and Quantitative Easing (QE), the Eurozone is still slow to recover. It seems like the banking situation in Europe is being swept aside and trouble is looming around the corner. The ECB will need to introduce tougher financial regulations to correct previous banking errors.
European members are recuperating at different paces and it is stalling the overall progress of a full recovery. Markets are favouring bond yields throughout this week. Markets will now turn their attention to the Italian referendum on 4th Dec, which may lead to a growing possibility of a ‘Italeave’. The Italian banks have been hammered throughout this week. Banco Pop.IT losing -2.60%. Intesa Sanpaolo (MI:ISP) down -3.55%.
The Italian bank Unicredito has set aside up to 8 billion for bad load provisions to try quelled fears of repeated financial collapse. Share prices has been rocked for 3 consecutive trading sessions, sending the stock plummeting to weekly lows of 2.018.