04 July 2016 by lberuti
Activity was a bit patchy as was expected on Independence Day. With US investors out for the day, markets struggle to find a clear direction after the impressive rally which took place from Tuesday onwards last week. One headline caught people’s attention though. The European Central Bank has asked MONTE ( Banca Monte dei Paschi ) to cut more than €14Bln of gross non-performing loans over 3 years. Selling such a large stock of soured loans could lead the bank to seek additional capital that investors are not available to provide. This underscores the difficulty of the weakest Italian banks and adds pressure to the industry. The rest of the Italian banks were generally weaker, and that soon affected all peripheral names, and eventually all the banks which outperformed last week, particularly the UK ones.