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Opinion
Ferdinando Giugliano

Italy’s Banks Stumble Into a New Crisis

The country’s lenders are stronger and better capitalized than in the past, but funding costs are increasing and bad loans are still a big problem. 

The Italian banking crisis is the beast that never dies.

The Italian banking crisis is the beast that never dies.

Photographer: Alessia Pierdomenico/Bloomberg

Spare a thought for Italian banks if you can. Barely recovered from their recent crisis, the country’s lenders find they have stumbled into a new one.

Rome’s populist administration has sent yields on government bonds soaring by passing a budget that busts the EU’s fiscal rules. And since Italian banks still hold hefty amounts of those bonds, investors have taken fright, dumping the lenders’ shares.