Another Banking Crisis Engulfs the Italian Economy

After the last financial crisis, Italy’s banks appeared fairly healthy due to their relatively small exposure to subprime mortgages leading to the 2007 crash. However, under the surface problems were piling up. Also unlike Spain or Ireland, Italy did not use EU funds to support its banks. Now as troubles are mounting, the government in Rome is seeking to help the country’s weakest lenders but faces much stricter European laws regarding bank bail-outs, suggesting another banking crisis is imminent. These rules were designed to shield taxpayers from covering the losses of bank failures.