People are afraid for the Italian banks to hold up because of the war but above all because of the Russian default.
It is no mystery to anyone that this international situation is frightening the customers of large Italian banks. The reason is very simple: Italian banks are exposed to Vladimir Putin’s country and the war risks destabilizing the international financial system.
There is no doubt that the Italian banks are suffering a bad blow due to the international crisis wanted by Russia. Many balances are likely to jumpbut the banks are the ones to go down the most on the stock exchange.
The point about banks
The real question is whether this can be a fatal blow or instead it is a failure absolutely absorbable by the institutions.
Let’s try to understand what is happening. The war destabilized the world economy and made inflation even tougher. This greatly increases the likelihood of a global recession. Even Goldman Sachs in a recent report said it was sufficiently sure that Italy and Germany will not only end up in recession but could even drag the rest of Europe into recession. In addition to the war problem, there is also that of the Russian default with all the consequences for creditors, including Italian banks.
Panic: but is it justified on the banks?
Bank account holders are rightly afraid because they don’t know at this point how safe their money is. If there are calls on the internet to withdraw money from banks, don’t panic. All the reports that have emerged to date have confirmed the same line and that is to say that Italian banks are solid overall and that the ugly international situation does not risk knocking them out. Furthermore, it must also be said that deposits up to € 100,000 are guaranteed by the state. But war is a very indeterminate scenario and there are those who fear that a protraction and worsening of the conflict could damage the international economic system too much.
Worst hypotheses
Even putting aside the strength of the banks, the problem is that a recession that for many could even turn into a stagflation would risk throwing too many balances into crisis. Furthermore there is also to say that the strong squeeze announced by the Fed most likely will not do the equity sector any good, which could also strongly reverse. However, even in the worst scenarios simulated by analysts, Italian banks always emerge as solid. JP Morgan and other analysts are practicing the famous worst case scenario, but nothing worrying has emerged so far.
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