Italy’s mountain of debt

Italy’s banks hold some €360 billion of bad loans which challenge new  EU rules that require private investors to be “bailed in” before banks are “bailed out” with EU taxpayers’ money 

Non-performing loans

Overdue by 90 days (scaduti o sconfinanti)

Unlikely to pay (incagli)

Rotten debt (sofferenze)

0 50 100 150 200 250 300 350 400 € billions

08 09 10 11 12 13 14 15

42 59 78 107 125 156 184 200

84 132 156 193 237 283 309 360

2008-15: House prices fall 16% (23% when adjusted for inflation) 

2009-2015: Company bankruptcies total 94,100

€180.5 billion: Non-performing loans held by Italy’s biggest banks (Dec 2015)

€20.6bn €33bn €46.9bn €80bn

Banca Popolare 23.3% of all loans

Intesa Sanpaolo 17.5%

Monte Dei Paschi 36%

UniCredit 17%

Bail-in rules: Force losses on bondholders and depositors before tax-payer funds are used. Individuals and households could lose estimated €180 billion-worth of bank bonds –  securities designed to attract ordinary families’ savings

Sources: PcW, Imprese Lavoro, Bank of Italy, ECB