The Carnage Continues: Italian Bank Stocks Crushed (Again)

The Carnage Continues: Italian Bank Stocks Crushed (Again) - Italian bank cartoon

"The chief executive and former chairman of Monte dei Paschi di Siena are under investigation for alleged market manipulation and false accounting, casting a cloud over Italy’s embattled lender nearly three weeks after it agreed to a dramatic €5bn rescue package," the FT reports.

"It is with confidence in the judicial system and serenity about the correctness of our actions that I await the quick clarification of the situation," writes CEO Fabrizio Viola in a statement. "I cannot hide that it is emotionally difficult for me as well as for the bank, considering the enormous efforts of these past four years to restore the bank to health, to witness further negative effects from past events and other people's actions."

Yikes!

Check out the struggling Italian banks dragging down the EuroStoxx 600 Bank index, with Italian banks such as UniCredit, Banca Popolare dell'Emilia Romagna and Banca Popolare di Milano Scarl down as much as 6%.

The Carnage Continues: Italian Bank Stocks Crushed (Again) - euro bank

The Carnage Continues: Italian Bank Stocks Crushed (Again) - euro bank 2

And yet, the ECB Minutes from July 21 show continued use of phrase “it [ECB] would act by using all instruments available within its mandate.” To be sure, the ECB's negative interest rate policy will continue to exacerbate existing problems in the Eurozone's banking system. 

 

Look out below!