Bank failures in Italy and the drawn-out rescue of Banca Monte dei Paschi di Siena SpA revealed the frayed edges in Europe’s patchwork of rules for dealing with firms in crisis, and fixes are needed to make the system work as intended, according to Elke Koenig, who makes the call on saving or shuttering major euro-area lenders, Bloomberg News reported. “Let’s try to look at the cases we had and see how to align the rules better,” Koenig, who heads the Single Resolution Board in Brussels, said in an interview.

Investors have damped their enthusiasm for European equity and bond funds, as fears over the path of quantitative easing in the region has sparked a global market sell-off, the Financial Times reported. Funds that invest in European stocks ended their longest run of inflows since the end of 2015, according to data from EPFR Global, with $480m being withdrawn by investors for the week ending July 5 — the first week of outflows since the end of March.

The European Central Bank has renewed debate over its €60bn of monthly asset purchases, sending government bond prices and stock markets lower on both sides of the Atlantic as markets anticipated a possible end to the eurozone’s ultra-loose monetary policy, the Financial Times reported. The minutes of the ECB’s June meeting, published on Thursday, showed that officials discussed whether to end the central bank’s promise to step up the pace of asset purchases if needed to stimulate the eurozone economy.

Banca Monte dei Paschi di Siena has confirmed the European Commission has given formal approval for its five-year restructuring plan, a move paving the way for the Italian state to take over the lender. The backing by the EU starts a precautionary recapitalisation of up to €8.8bn, removing a significant weight from the Italian financial system, the Financial Times reported. Monte Paschi has weighed on Italian banking stability since the European sovereign debt crisis.

CaixaBank is marketing the first Spanish Tier 2 since subordinated debt was wiped out at Banco Popular in June, and just a day before Bankia is expected to bring its inaugural Additional Tier 1, Reuters reported. Orders of over €2.75bn by the 11NC6's second update implied that investors are willing to overlook the punitive treatment of Tier 2 debt at Popular, even for second tier lenders. "It is a good credit and I'd expect it to go well, and the price looked fair," said a banker off the deal.

A decade has passed since the start of the financial crisis, but when it comes to handling struggling banks, the European Union still hasn’t moved on. Italy’s taxpayer-funded wind-down of Banca Popolare di Vicenza SpA and Veneto Banca SpA highlighted the patchwork of EU and national laws and guidelines that govern the funneling of public money to banks, despite years of work on a common rule book intended to end the era of big bailouts, Bloomberg News reported.

The Bank for International Settlements is the stopped clock of international economic institutions. It has argued for monetary and fiscal tightening, whether that makes sense, or not. Fortunately, policymakers, or at least the central banks that are members of the BIS, have ignored its apparent conviction that the world needed an even deeper and more prolonged recession Yet now, precisely because central banks wisely ignored its advice, a synchronised recovery has finally arrived, the Financial Times reported in a commentary.

The state-backed rescue of Banca Monte dei Paschi di Siena SpA may be approved by the European Commission as soon as today, completing a six-month review of the restructuring of the world’s oldest bank, according to people familiar with the matter. EU approval would pave the way for a precautionary recapitalization of the lender, making it the third Italian bank to obtain state aid this year, Bloomberg News reported.

Global regulators have claimed victory in the drive to tame the toxic parts of the “shadow banking” market that made a devastating contribution to the global financial crisis a decade ago, the Financial Times reported.

Inflation in the eurozone has edged further below the European Central Bank’s target, capping a difficult week for its officials as they edge towards removing some of the ultra-loose monetary policies in place during the financial crisis, the Financial Times reported. Annual inflation in the eurozone sank to 1.3 per cent in June, highlighting the delicate balancing act facing monetary policymakers in dealing with increasingly strong growth but weak price pressures. Eurostat, the European Commission’s statistics bureau, said inflation fell from 1.4 per cent in the year to May.