For days, I have felt morally obliged to report on the Italian slow motion crisis of banks with tens of billions of non performing loans. I’ve had trouble making myself work (as usual). So I hand the mike to Daniel Davies.
The background is that the world’s oldest bank Monte Dei Paschi di Sienna is in trouble (again). It has about 40 billion Euros of non performing loans on its books and has set aside about 20 billion Euros to cover them. The Italian government wants it to recapitalize by issuing new shares (which the Italian government will buy if no one else wants them as is likely). The European Union is telling the Italian government it can’t do this. There is a Euroconstitutional crisis.
Daniel Davies knows which side he is on.