Italian President Sergio Mattarella asked Foreign Minister Paolo Gentiloni on Sunday to try to form a new government, giving him a mandate to lead Italy out of a political crisis caused by the resignation of Matteo Renzi. Gentiloni, a former journalist and Renzi loyalist, is set to be Italy's fifth prime minister in as many years and the fourth in a row to take office without winning a national election. The soft-spoken 62-year-old immediately began consultations to form a government that will have to write a new electoral law and manage Italy's fragile banks. Chief among his duties will be dealing quickly with Monte dei Paschi di Siena, the country's third-largest lender, which may need state intervention to avoid collapse. "I am aware of the urgent need to give Italy a government with full powers, to reassure our fellow citizens, to confront our international, economic and social priorities," he said. Italy's social and political divisions were laid bare in campaigning for a Dec. 4 … [Read more...] about Italy hurries to form new government as banking crisis looms
Banking crisis
No banking crisis in Vietnam, cbanker says
Vietnam is not experiencing a banking crisis, despite a quick increase in non-performing loans recently and plans to restructure the troubled sector, the central bank governor, Nguyen Van Binh, said on Thursday. "There is no banking crisis in Vietnam," Binh said in remarks carried live on state media. Economists have expressed growing concern about the health of the banking system after soaring inflation and slumping property prices followed years of unsustainably high credit growth. Rumours have circulated for months that some smaller banks are already technically insolvent, but none have collapsed publicly and the central bank has pledged to stave off bank failures. The State Bank of Vietnam has been encouraging mergers of weak banks with stronger ones and Binh told an economic forum on Wednesday he expected as many as eight banks to be merged during the first quarter of 2012. But there is little clarity about the central bank's plans for handling non-performing loans, which … [Read more...] about No banking crisis in Vietnam, cbanker says
Clear heads need to prevail in banking crisis
Thailand's banking system has rebounded strongly from the country's 1997 financial crisis. On the sidelines of the recent East Asia Conference for Financial Stability in Hanoi, Bank of Thailand assistant governor Salinee Wangtal told VIR's Trinh Trang about lessons that Thailand's bankers learned on implementing monetary policies after the crisis. What is the suggestion from the Bank of Thailand to the State Bank of Vietnam (SBV) on interest management direction? I asked Thailand commercial banks which are operating in Vietnam about their problems and how the Vietnamese economy is. They said everything was going fine, the gross domestic product (GDP) was growing, but interest rates were very high. I remembered during the crisis in 1997 the International Monetary Fund (IMF) forced banks in Thailand to increase interest rates. The IMF felt that if we increased the interest rate then it would support foreign exchange rate as at that moment, investors did not have confidence in the … [Read more...] about Clear heads need to prevail in banking crisis
Banking crisis, weak growth raise pressure for ECB rate cut
The global banking crisis and weak economic growth have increased the pressure on the European Central Bank to cut interest rates but it will likely opt for no change again on Thursday, economists say. Concern that higher wages could stoke inflation "may tie the ECB's hands for the time being" and ensure its main lending rate stays at 4.25 percent, UniCredit Markets economist Nikolaus Keis said. Pedestrians walk past a giant Euro-logo in front of the European Central Bank (ECB). … [Read more...] about Banking crisis, weak growth raise pressure for ECB rate cut
Spain borrowing costs hit euro-era high in bank crisis
Spanish borrowing costs roared to a euro-era record high Tuesday on a market beset by doubts over a vast rescue loan for the country's banks and by fears of a Greek exit from the eurozone. A man with a sign reading ''Help me, I am hungry'' asks for money in front of a bank in Madrid on June 9. Spanish borrowing costs roared to a euro-era record high Tuesday on a market beset by doubts over a vast rescue loan for the country's banks and by fears of a Greek exit from the eurozone. Photo: AFP Markets appeared to be in alarm despite eurozone powers striking a deal on Saturday to extend Spain a banking sector rescue loan of up 100 billion euros (US$125 billion). Two major concerns stood out: doubts over Spain's outlook even with the eurozone rescue, and Greek elections on Sunday, which in a worst-case scenario could send Athens back to using the drachma. Adding to the Spanish agony, Fitch Ratings downgraded 18 more Spanish banks a day after cutting its ratings on the two biggest … [Read more...] about Spain borrowing costs hit euro-era high in bank crisis