— Analysis

  1. Markets

    Record-breaking buy-back with syndicated exchange smooths the edges of the biggest BTP Italia ever

    by Isabella Bufacchi

    IT
    24 Exclusive content for IT24

    The biggest issue ever placed by the Italian Treasury in one shot is the BTP Italia maturing November 12 for €22.4 bn. It is just too big, a monster dimension, not easy to be refunded there again in one shot: its size had to be reduced, to smoothen the liability management of Italy’s public debt. But how? The BTP Italia is a special bond, linked to the Italian inflation rate and aimed at retail investors: ...

  2. Markets

    Here's why markets are shrugging off terror attacks

    by Morya Longo

    IT
    24 Exclusive content for IT24

    At least 189 people fell victim to terror attacks in western countries in 2016. That is 174% higher compared to 2015, according to the insurance broker Aon, and it is a signal of war. Yet many markets are close to historical highs, or rising strongly. There are two possible reasons: either the financial markets have become too cynical and dehumanized, or the attackers are no longer able to create any sort of terror. Whatever the ...

  3. European view

    Euro, the big defeat for the economics profession

    by Alberto Bagnai

    IT
    24 Exclusive content for IT24

    The euro has been the greatest success of economic science but is becoming the most humiliating defeat for the economics profession. I thank Il Sole 24 Ore for it openness in allowing me to set ...

  4. Markets

    BTP Italia's 11th issuance kicks off smoothly, aiming to attract retail and institutional demand

    by Isabella Bufacchi

    IT
    24 Exclusive content for IT24

    Italian savers’ favorite inflation-linked bond, BTP Italia, kicked off its eleventh issuance yesterday, May 15, with 6-year maturity, a guaranteed minimum annual (real) coupon rate set at 0.45% and €1.615 bn orders with 29,000 contracts from retail investors: small savers will have up to Wednesday to book their orders, which will be totally filled by the Treasury. On Thursday it will be the turn ...

  5. Markets

    Macron's victory: a game changer for Italy sovereign risk?

    by Isabella Bufacchi

    IT
    24 Exclusive content for IT24

    The euro area market focus is shifting from France to Italy, holding the hope that Emmanuel Macron’s victory will become a game changer for Italy’s stubbornly high sovereign risk. After digesting Brexit and Grexit with some hic ups, after getting rid of Frexit and coming to terms with Trumpism, markets are bound to re-open the Italian file as Italy’s unresolved political turbulence and populism continue to mix up with high public ...

  6. European view

    History doesn't run in reverse

    by Barry Eichengreen

    IT
    24 Exclusive content for IT24

    A good case can be made that creating the euro and Italy's participation were both historic mistakes. The problem, we now know, is that monetary union without banking union and ...

  7. European view

    Return to the Lira? A long-run view

    by John H Cochrane

    IT
    24 Exclusive content for IT24

    Should Italy have her own currency, and run her own monetary policy? For today, let’s focus on the long-run question, leaving out for now the transition and any immediate ...

  8. Markets

    Atlantia said to be mulling counterbid on 100% of Venice airport operator SAVE

    by Laura Serafini

    IT
    24 Exclusive content for IT24

    Highways operator Atlantia has been considering for several week the opportunity to launch a takeover bid on 100% of SAVE, which controls the airport of Venice. The company has already contacted financial and legal advisors with the intent of moving soon, possibly by the summer. Publicly however Atlantia continues to rule out such option. “We are neither aggressive by nature, nor passive,” Chairman Fabio Cerchiai said ...

  9. Markets

    Latest inflation data put to rest debate over possible early tapering by the ECB

    by Alessandro Merli

    IT
    24 Exclusive content for IT24

    The sharp drop in eurozone inflation at 1.5% in March is going to appease, at least for now, the debate about the tapering of monetary stimulus by the European Central bank.At his latest press conference, ECB President Mario Draghi said he expected inflation to remain close to 2% for some months. The rapidity of the decline could have taken the ECB by surprise. The debate about an early reduction of the monetary stimulus which started in ...

  10. Markets

    LSE-Deustche Börse merger is the first victim of Brexit

    by Alessandro Merli

    IT
    24 Exclusive content for IT24

    The skyline of Frankfurt, which locals love to call “Mainhattan,” dreaming of New York on the Main, is throbbing with cranes. The construction of office buildings has been moving ahead without pause for months. The financial capital of Germany is hoping to capture a good part of the flow of the financial institutions and services firms that will be leaving the City of London. Time will tell if that's a valid expectation, or a ...

  11. European view

    Brussels formally blocks LSE-Deutsche Börse deal

    by Beda Romano

    IT
    24 Exclusive content for IT24

    The European Commission yesterday refused to clear the merger plan between the London Stock Exchange and Deutsche Börse, citing competition regulation. The announcement came on the day ...

  12. Markets

    Bond markets favor the periphery and Italian treasury reopens 50-year BTP

    by Claudio Celio

    IT
    24 Exclusive content for IT24

    The round of government bond auctions at the end of March has come at a favourable market moment for euro zone periphery debt, and for Italy especially. Yesterday Italy issued €2.5 billion worth of zero coupon CTz bonds at negative rates (-0.085%) and did better than Spain and Portugal on the secondary market despite there being plenty of supply on the agenda up to Thursday (a total of €18 billion). On the secondary ...

  13. Markets

    Italian banks take up the most liquidity in ECB's Tltro2, €62 bn out of €233 bn total

    by Luca Davi

    IT
    24 Exclusive content for IT24

    European banks showed record appetite in the fourth and final sale of cheap funds by the European Central Bank, also known as Tltro2. Demand from 474 lenders was for €233 billion, double the expected size and a record since the program was launched. It’s difficult for European banks to waste a good opportunity to fund themselves at almost zero interest rates with four-year maturity loans, especially when loans can yield up to ...

  14. Markets

    Why Veneto popolari banks' shareholders feel betrayed, even as they lean towards accepting a settlement

    by Katy Mandurino

    IT
    24 Exclusive content for IT24

    More than three years have passed since the case of the “Veneto popolari” mutual banks exploded, starting the financial decline of two major Italian lenders: Banca Popolare di Vicenza and Veneto Banca. These two banks were strongholds of one of the richest and industrialized regions of Europe, the Veneto in Northern Italy. And still we are unable to come to terms with how such a collapse could have happened. It has been an unrelenting ...

  15. Markets

    The €5.5 bn price tag for rescue of four regional banks shows the high cost of wasted time

    by Marco Ferrando

    IT
    24 Exclusive content for IT24

    While the closing of the deal will still take some time, the sale of CariFerrara to Banca Popolare Emilia Romagna (BPER) for one euro is a step to wrapping up the sale of the four “good” banks created from their €3.6 billion rescue in November 2015 (CariFerrara, Banca Marche, Popolare Etruria and CariChieti). The final price, according to Il Sole 24 Ore calculations, is very high: around €5.5 ...

  16. Markets

    Italian banks are getting a "bonus" from rising European interest rates

    by Morya Longo

    IT
    24 Exclusive content for IT24

    European banking shares rally, supported by expectations of a interest margin boost from likely higher US interest rates. But every coin has two sides: if interest rates go up, European banks could suffer losses in their bond portfolios. Before celebrating, a few questions remain: will higher interest rates benefit all banks? What European credit system would benefit the most? Could there be side effects for banks' balance ...

  17. Markets

    Maxi-merger LSE-Deutsche Boerse at risk over Milan's MTS

    by Antonella Olivieri

    IT
    24 Exclusive content for IT24

    Over the years, there have been several attempts to combine the stock exchanges of London and Frankfurt. While the main hurdle was initially represented by derivatives, now the problem are the post-trading and especially clearing activity. The Brexit referendum has made things worse and the agreed plan to have the new company headquartered in London has been called into question. But nobody expected the problem to come from Italy, especially from ...

  18. Markets

    A strong signal of confidence in Italy

    by Alessandro Graziani

    IT
    24 Exclusive content for IT24

    What would have happened to the spread, to yields of Italian sovereign debt and more generally to the perception of risk in Italy among global investors if UniCredit’s €13 billion maxi capital increase hadn’t gone forward? Better not to think about it. Because the €20 billion provided by the state to rescue banks in crisis would, by all accounts, not have been enough. It should be acknowledged that the bank's French CEO ...

  19. Markets

    Bank rescue law approved by parliament, ball now passes to lenders

    by Davide Colombo and Gianni Trovati

    IT
    24 Exclusive content for IT24

    The €20 billion bank rescue bill was voted into law on Thursday, and now the ball passes to the banks, who want to, or should, request public guarantees for liquidity measures or state intervention for precautionary recapitalization. The attention at this point is focused entirely on Monte del Paschi, which is set to receive a €6.6 billion investment from the government. It will then move to the Veneto banks, for which the CEO ...

  20. Markets

    The long tail of NPLs and the profitability challenge

    by Fabio Pavesi

    IT
    24 Exclusive content for IT24

    For Italian banks, at a level of balance sheet results, the hands of the clock have turned back dramatically to an era that had seemed definitively behind us. Last year saw a steep decline in net profitability. Losses of nearly €15 billion accumulated by major banks wiped out, in one fell swoop, a profit increase (that proved to be ephemeral) in 2015, when the banking sector managed to turn in a profit of nearly €6 ...

  21. Markets

    Balance sheet cleanups cost Italian banks €14.8 billion in losses last year

    by Marco Ferrando

    IT
    24 Exclusive content for IT24

    Each of Italy’s big banks has apparently had a good reason to clean up its loan portfolios in the final months of 2016: UniCredit because of the capital increase, Banca Monte dei Paschi di Siena because of the imminent state bailout, Banco BPM because of its merger, and UBI Banca so it to take over the “good banks” resulting from the rescue of four regional lenders at the end of 2015. Italian banks had an extraordinary 2016, when ...