Italy fantasizes that it can hide the fact that 18% of it's gross lending is non-performing, and an additional 9% are deeply underperforming . . .
Italy Concocts €5 Billion “Atlas” Rescue Fund to Cure €360 Billion in Non-Performing Loans; At Gunpoint | MishTalk
. . . by putting together a fund equal to 2% of the needed money, and calling it "Atlas."
Holy Mother of Pearl, that will need to do better than that, Batman!
Mish defines the terms:
"€5bn backstop – 2% of what’s needed
Atlas, a mythological god who held up the sky – It a myth this scheme any chance of working
Bankruptcy procedure – Banks will take over pledged assets and sell them for whatever price they can get, causing more capital shortfalls.
Tense meeting – Tense meeting
No choice but to give money to ensure financial stability – This is the exact equivalent of Hank Paulson gathering US banks together and
demanding various mergers or he would shut them down
Private company – Taxpayer sponsored under the table
Capital hole uncovered by EU regulators after a mis-selling scandal – Hole was so big regulators did not find it, they fell into it
Capital call – Margin call by regulators
Likely to trigger competition scrutiny – Illegal under EU rules
Eleventh hour – Noon
€1.75bn cash call – First margin call is set at €1.75bn
Two further cash calls – Two more margin calls coming
Flash point – Flash point
Not the first time – And certainly not the last"
Heh! The idea that this drop in the bucket will solve or even slightly mitigate the problem is folly. Italy has a serious problem, which comprises a huge percentage of its total loan portfolio. If this problem remains unsolved, it will eventually all but destroy the Italian economy.