The WSJ has obtained documents showing Italian banks could be pushed to sell assets or raise cash after Bank of Italy inspections.
The Bank of Italy is digging even deeper into the loan portfolios of some top banks, according to the document, while launching on-site inspections of an additional 20 lenders.
The main problem is non-performing loans, which have risen for at least 27 consecutive months, especially among small and medium-sized businesses. This review seems to indicate an earlier examination raised questions that merited a closer look.
In some cases, the inspection became “a full-scope examination of the entire operational activity of the group,” the document said. It isn’t clear which banks are facing those reviews, which are ongoing.
