Italy

UBI Banca is preparing to issue the year's first Tier 2 bond in euros from an Italian bank, a crucial test of appetite for subordinated debt from one of the country's smaller lenders as the government tries clean up its troubled banking sector. Giorgio Erasmi, head of funding, and Laura Ferraris, head of investor relations, will meet investors in Milan, London and Paris from Thursday 21 April to Tuesday 26 April.

An Italian decree to speed up recovery of bad loans and compensate people who lost their savings in a bank rescue will not be discussed at a cabinet meeting on Wednesday, two sources said on Tuesday, Reuters reported. Wednesday's meeting had been expected to yield an emergency decree containing both measures, but a government source and a banking source said it would not be on the agenda. The cabinet will probably discuss and approve the decree next week, one of the sources said.

Italian officials and financial firms agreed to create a multibillion-euro fund to help weakened banks raise capital and unload bad loans, as the nation tries to assuage investor jitters and avert a crisis, the Irish Times reported. The new fund, named Atlante, will be supported by numerous institutions, its manager, Quaestio Capital Management SGR, said late Monday after more than a week of meetings among banks, insurers and state lender Cassa Depositi e Prestiti.

Italy is rushing to cobble together an industry-led rescue to address mounting concerns over the solidity of a banking sector whose woes pose a risk to the wider eurozone economy, the Financial Times reported. Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy’s largest financial institutions to agree final details of a “last resort” bailout plan.

Italy’s bank chiefs gathered in Rome this week to discuss what could be done to solve the industry’s woes. So far, they have announced precisely nothing. The silence reflects a stalemate that can’t be broken unless there is a major, but unlikely, shift from Italy’s banks or the European authorities, the Irish Times reported. At the root of the problem are Italian lenders’ €360 billion of non-performing loans.

Italian business risks “asphyxia” due to a relentless German focus on austerity and debt reduction, making a “disaster” exit from the euro increasingly possible, one of Italy’s leading industrialists has warned, the Financial Times reported. The rare comments from Gianfelice Rocca, the country’s eighth richest man and the head of its largest business lobby, reflect the frustration and worry in corporate Italy as the eurozone’s third-largest economy makes a fitful emergence from a crippling three-year recession.

An Italian banking merger that executives see as a crucial step for cleaning up the sector is teetering on the brink of collapse amid a struggle to win approval from the European Central Bank, the Financial Times reported. Senior financiers are warning that the proposed merger between the mutual banks Banca Popolare di Milano and Banco Popolare will fall apart if it fails to secure approval from Frankfurt regulators by next month.

Italy — the eurozone’s third-largest economy and second-largest manufacturer — did finally emerge from a bruising triple-dip recession in 2015 when it recorded 0.7 per growth, the Financial Times reported. But hopes of a strong acceleration in the pace of the recovery in 2016 have already dimmed thanks primarily to international factors, such as emerging market weakness and the turmoil afflicting the global financial markets since the start of the year. That sparked a sharp drop in Italian equity prices, particularly those of the country's banks.

The Bank of Italy has long been considered a bastion of competence and stability in the eurozone’s third-largest economy — a counterweight to the often flighty economic stewardship of successive governments in Rome. But the sharp sell-off of Italian financial shares since the turn of the year — as investors fret over tough new EU “bail-in” rules and the large pile of non-performing loans on banks’ balance sheets — has turned up the heat on the central bank amid charges that it failed to protect the banking system.

Italy and the EU have reached a deal allowing Italian banks to sell their large portfolios of non-performing loans to private investors with a government guarantee, in an effort to ease market pressure on the financial sector in the eurozone’s third-largest economy, the Financial Times reported. The agreement, which follows months of tortuous negotiations between Rome and Brussels, is intended to clear one of the most worrying clouds hanging over the European financial system after the end of the continent’s long recession.