EU watchdogs: there’s no need to worry about Italian banks

EU watchdogs: there’s no need to worry about Italian banks

European banking watchdogs have ramped up their monitoring of liquidity of Italy’s financial institutions after an abrupt surge in Italy’s government bond gains. However, there’s no cause for worry, as a senior EU source disclosed on Tuesday.

According to the source, the monitoring was conducted more intensely than before because of recent market turmoil.

Eventually the checks covered customer deposits as well as the interbank market, which Italy’s financial institutions utilize to lend to each other without requesting collateral. As a result, the watchdogs didn’t find any sings of alarm.

Both the European Bank and the Bank of Italy refused to comment.

The ECB, in tandem with national watchdogs regularly closely watches lenders' liquidity conditions and also adjusts its monitoring, in particular its depth and frequency, during the periods of stress or big fluctuations.  

Evidently, a budget standoff between Italy’s anti-establishment government and EU authorities on Tuesday backed Italy's benchmark 10-year debt costs, pushing it to 3.72%, which is the highest outcome since February 2014.

The previous month the ruling coalition set a deficit objective of about 2.4% of economic output for next year, thus tripling the previous cabinet’s objective for the heavily indebted country, unnerving traders and also provoking sharp criticism from the European Commission.

Italian financial institutions are quite vulnerable to sovereign debt issues due to the fact they hold approximately 375 billion euros of domestic bonds, which accounts for 10% of their assets.

The equities in the country's lenders have headed south abruptly for the last time and the cost of insuring key financial institutions’ debt against a potential default has tacked on.

However, the sufficient liquidity provided by the European Central Bank for the period of ultra-expansionary monetary policy is protecting the interbank market from any tensions, as some financial analysts pointed out.


Latest news

Where is Dogecoin?
Where is Dogecoin?

Did the era of the Dogecoin, the most famous cryptocurrency, come to its end, or it is just a calm before the storm? Let’s find out!

Key Market Driver: FOMC Statement
Key Market Driver: FOMC Statement

The FOMC, a committee within the Federal Reserve, will hold an important meeting and press conference on September 22 at 21:00 MT time (GMT+3).

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera