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Italy’s 2017 banking crisis

The question of how to deal with the consequences of bank failure has been much debated since the financial crisis of the late 2000s. George Vlachonikolis examines the more recent banking crisis in Italy

Answers to the questions in this article are provided online at www.hoddereducation.co.uk/economicreviewextras

In late June 2017, just as many of us were getting ready for the summer holidays, the Italian government’s use of taxpayers’ money to prevent the collapse of two regional banks — Banca Popolare di Vicenza and Veneto Banca — sent shockwaves around the European Union. While the strategy seems to have fixed a short-term problem, it may have inadvertently undermined the credibility of financial regulation in the eurozone and damaged the long-term prospects for the European banking sector.

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