Italy's financial crisis could DESTROY the Euro

[cronus]

http://www.express.co.uk/news/world/684 ... ion-Brexit

Italy's financial crisis could DESTROY the Euro as nation tipped to be next domino to fall

The country is facing a series of economic and political crises which could see it crash out of the eurozone just months after Britain rocked Brussels by backing Brexit.

Following the historic vote on Thursday, Italy’s top stock market saw its biggest ever one-day fall of 12 per cent, as traders rushed to dump financial stocks.

The carnage continued this week with shares in the nation's two biggest banks, UniCredit and Intesa Sanpaolo, falling by eight and more than 10 per cent respectively.

Investors are worried Italian banks could go under, thanks to billions of pounds worth of bad loans on their books.

They are estimated to have around £270billion of loans that could default and spark a financial crisis in Italy. Experts believe it could rip apart the eurozone.

Italian policymakers fear hedge funds could start to bet against the banks, which would help tip them over the edge.

(continued)

[mistermack]

And all this on the continent that people think can take the financial business off London.

Fat chance. I reckon that Brexit will strengthen London in the long run.
A London immune from the creative accounting on the continent will be more attractive to the neutrals.

If tarriffs or restrictions are imposed by Brussels on London financial trade, they should be met with equal tarriffs on European cars and white goods.

[NineBerry]

A newspaper with some specific political leaning quotes a journalist (Wolfgang Münchau) with a specific political leaning. Nothing reliable there.

[Scot Dutchy]

And all this on the continent that people think can take the financial business off London.

Fat chance. I reckon that Brexit will strengthen London in the long run.
A London immune from the creative accounting on the continent will be more attractive to the neutrals.

If tarriffs or restrictions are imposed by Brussels on London financial trade, they should be met with equal tarriffs on European cars and white goods.

Cant get it can you mm. The EU are in the driving seat. The Depress rag is trying to keep up the Brexit moral as it waning more more as people realise they have been taken by the nose and told a monkey load of lies.

As Nine says two of the most unreliable sources you can get. Britain better start get that begging bowl ready.

[Hermit]

A newspaper with some specific political leaning quotes a journalist (Wolfgang Münchau) with a specific political leaning. Nothing reliable there.

Yabbut "Experts believe..."

[cronus]

http://www.zerohedge.com/news/2016-06-2 ... ilout-plan

Germany Just Blew Up Italy's Bank Bailout Plan


"You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before."
Rahm Emanuel prophetic words were quickly put to use by Italy on Monday morning, which barely waited one full day before using Brexit as the scapegoat excuse to warn that a €40 billion bailout of Italian banks is coming.

As a reminder, on Monday morning the local media reported that Renzi's
government was pursuing a six-month waiver of EU state-aid rules,
allowing it to shore up banks without forcing investors to share losses. Two days ago, when we first reported of Italy's proposed bank rescue plan, we said that the chairman of Lower House’s Finance Commission, Maurizio Bernardo, confirmed that the government is studying options to support the banking sector, including a capital injection, and said a law decree “with measures going in that direction” could be approved by the end of this week.

We pointed out that how such an intervention would be implemented was unclear; it was is also unclear how such a direct state recapitalization of Italian banks using public funds would be permitted by current EU and ECB regulations, which prohibit state bailouts of insolvent banks, although Europe has a long and illustrious history of finding massive loopholes to that particular prohibition. "Last but not least it is unclear how existing stakeholders, shareholders, bondholders and uninsured depositors, would be impaired under such a bailout."

Well, they wouldn't, despite Europe's recent implementation of bail-in rules. That was the whole point.

However, while Italy was hoping it would get a "pass" on using public funding, mostly Eurozone generated and thus courtesy of Germany, this appears to have hit a dead end moments ago, when Bloomberg reported that Germany opposes any attempt to shield private bank investors from losses if Italy pushes ahead with plans to recapitalize lenders. Chancellor Angela Merkel’s government says that European Union rules on handling struggling banks should apply in any rescue effort, including forcing losses on shareholders and some creditors before public money can be injected, the person said, declining to be identified because the deliberations are private.

And just like that Renzi's entire recapitalization plan has gone up in smoke, because if there is one person in Europe who can veto an Italian bailout, it's Merkel, which is precisely what she has done.

As Bloomberg adds, any waiver of the rules would be complicated, as Germany insists that the EU’s Bank Recovery and Resolution Directive be applied. That will mean Italy must first avoid triggering a wind-down procedure. The assumption in BRRD is that the need for “extraordinary public financial support” for a bank indicates that a bank is “failing or is likely to fail, and therefore triggers the need for resolution,” according to the European Banking Authority.

Also according to the source, Germany isn’t pushing for banks to be wound down, according to the person. The government does, however, want to ensure that private investors are tapped before any public money is put into the banks. EU state-aid rules normally require shareholders and junior creditors to share losses.

That, as we noted on Monday, is a dead end: currently, it is practically impossible for Italian banks to raise capital. "They are caught in a pincer as the ECB simultaneously demands compliance with tougher capital adequacy buffers, in some case demanding fresh infusions of capital three or four times. The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year. They were classified as junior bondholders, even though most of them were just ordinary savers who did not realize what was being done with their money."

(continued)

[mistermack]

Cant get it can you mm. The EU are in the driving seat.

Of course, they can drive their own car. But they can't drive anybody else's.

They are making noises as if they are tough, in order to scare their own dissenters.
But the fact is that they want access to the UK market. The UK wants access to the EU market.
But they are being deliberately misleading.
Access to the single market doesn't mean what you seem to think it means.
What they are talking about, is free trade with all the EU members. It doesn't mean ALL trade with the EU.

China doesn't have access to the single market. But it sells billions of Euros worth of stuff to EU members. Same goes for the USA.

Neither has free movement of labour with the EU. You need a work permit and visa, if you want to work in the USA. Same as Australia. But they all trade with the EU.

Britain will be on a similar trading basis. There can be tarriffs on trade, but they can be matched with tarriffs on EU goods.

[Scot Dutchy]

Never mind.

[mistermack]

The pound has been climbing all day.
Right now it's trading at nearly one Euro 22. In early April, it was trading at about 1.24.
Nobody was jumping off window ledges.

Shares are climbing back up.

Financial Times‎ - 5 hours ago
"The rally has now driven the FTSE to just 22 points shy of its pre-Brexit level of 6301."

To be realistic, if it was just David Cameron and Osborn going, the effect on the markets would be much the same.

[Scot Dutchy]

Why do you think why? Go on spoil yourself.



















Brexit is not going to happen that why.

[mistermack]

Why do you think why? Go on spoil yourself.

Can't you work it out?

Why do people normally buy things? Because they like the price or need the product. Or both.

Brexit is not going to happen that why.

That's possible. Everything's possible. Maybe you know the future.
I don't recall you correctly forecasting the out vote though. So maybe, you're just bullshitting.
We all do it.

[cronus]

The price as improved in the UK cos Europe is looking dodgy.

[Scot Dutchy]

Why do you think why? Go on spoil yourself.

Can't you work it out?

Why do people normally buy things? Because they like the price or need the product. Or both.

Brexit is not going to happen that why.

That's possible. Everything's possible. Maybe you know the future.
I don't recall you correctly forecasting the out vote though. So maybe, you're just bullshitting.
We all do it.

I never said who was going to win the referendum. In the back of my mind I always feared that leave would win which is why I never said anything.

Markets always respond to rumours. The falls of the last days suddenly turned without actual real reason. Kerry's comment on walking the decision back plus Merkel's delay could have been more than enough to give the markets hope.

[cronus]

Why do you think why? Go on spoil yourself.

Can't you work it out?

Why do people normally buy things? Because they like the price or need the product. Or both.

Brexit is not going to happen that why.

That's possible. Everything's possible. Maybe you know the future.
I don't recall you correctly forecasting the out vote though. So maybe, you're just bullshitting.
We all do it.

I never said who was going to win the referendum. In the back of my mind I always feared that leave would win which is why I never said anything.

Markets always respond to rumours. The falls of the last days suddenly turned without actual real reason. Kerry's comment on walking the decision back plus Merkel's delay could have been more than enough to give the markets hope.

Brexit won't happen until after the Tory conference so it makes sense to put the looted funds back in the market so when the true Brexit comes along the speculators can short the markets over again....

[mistermack]

What we have at the moment is European leaders shitting themselves that someone else will call a referendum. Hence, all the bullshit comments from them.
They want to keep the turmoil going, to put members off considering their own referendums.
It's possible that they can keep influencing the market for a few days, maybe a few weeks, but eventually traders will become immune to it.

It's nothing to do with the market fundamentals, or the UK's real prospects.

Personally, I would be starting to wonder if I really wanted to stay a member of a club that had to try to intimidate people against leaving.