Yesterday, the European trading floors have been suspended trading in shares of Italian banks due to heavy fall of prices.
As reported today by representatives of the Italian stock exchange Borsa Italiana, which is owned by the British corporation of stock exchange operators “London Stock Exchange Group plc”, tradings of all securities of the largest financial institutions of this country have been temporarily suspended.
In particular, quotes of UniCredit SpA had to adjust to 5.42% until the lock, Intesa Sanpaolo SpA shares collapsed by 7.95%, the shares of Banca Monte dei Paschi di Siena SpA fell to 7,95%, Banco Popolare SC – by 6, 47% and Mediobanca Banca di Credito Finaziario SpA - by 4.62%.
This dynamics are clear evidence of extreme nervousness of market participants. Many investors do not leave the euro area banking sector any chance for survival.
As reported, the yield of Spanish government 10-years bonds today reached 7.55% per annum. This is a new record for Spain during the existence of the euro zone. Same bonds of Italy tested today the mark of 6.37%.
Yesterday the Euro tested new lows: EURUSD 1.2080 with negative prospects.
Recall that July 17 this year International rating agency Moody's downgraded the long-term credit ratings of 13 Italian banks.
It should be noted that despite the low level of debt of Italian households and developed sector of small and medium-sized enterprises, Italy has a large foreign debt. Economists estimate that it already exceeds 118% of GDP (about 2.2 trillion euros). The Italian government has adopted an additional program of budget cuts by 4.5 billion euros this year.
At the end of June this year on the basis of the EU summit in Brussels, EU leaders agreed on a series of measures aimed at reducing the cost of borrowing in Italy and Spain. It was also decided at the end of this year to establish a single supervisory body which will oversee the banking system of the block.
All the news tells us that the prospects for recovery of European economy, and the Euro, are still very vague. And the creation of various regulatory authorities of EU’s, ECB’s and IMF’s bureaucrats directly affects the loss of sovereignty and independence of the troubled countries.
Greece, Spain and Italy are already experiencing the direct interference in the internal affairs of the country. Who is next? The EU was created as a community of equals but turns into a kind of financial Reich, defending the interests of only the big groups of economical elites.