ECB Signals Debt Crisis Is Boosting Italian Insolvencies

Fallout from the euro region’s debt crisis has led to more corporate insolvencies in Italy than in countries in northern Europe, the European Central Bank said in its monthly report.

Corporate defaults increased “substantially” in the second half of 2011 as the crisis intensified, compounding the effects of weakening economic growth, the Frankfurt-based ECB said in an article on risk to private companies from the debt crisis published in yesterday’s monthly bulletin.

“Across the larger euro-area countries, this rise was particularly pronounced for Italian firms, while it was rather subdued for Dutch and German firms,” according to the report.

To contact the reporter on this story: Andrew Davis in Rome at abdavis@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net