Bank of Italy Governor Ignazio
Visco told the European Parliament's economic committee on
Tuesday that the country's problem with bad debts must not be
overstated.
"You cannot talk of a time bomb in reference to something
that is worth less than 1% of the country's GDP," Visco said.
"We have a total of around 80 billion euros in non-performing
loans for the big banks, Intesa, UniCredit, UBI, and a smaller
part for those in difficulty like MPS and the Veneto banks,
where we have a total of 20 billion in NPLs".
Visco said that fraud was a major factor in the troubles the
Italian banking sector is currently enduring.
"An economic crisis of these proportions could not fail to
hit the Italian banks," he said.
"At the origin of the banks' difficulties we found company
decisions tainted by fraudulent behaviours and imprudent
decisions on the allocation of credit - a combination of
potentially devastating factors.
"Nevertheless, the damage to the banking system was
concentrated in a few, well-identified intermediaries, who have
been subject to intense oversight and continue to be so".
Visco added that it is possible that the bank sector is "an
industry that will not return to the profit levels of the past".
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