Italy Can’t Live Without Its ‘Naughty’ Bankers
The populists promised to stop giving money to banks and protect investors. But the plight of Carige shows this is pretty much impossible.
Italy's populist rulers are about to break another promise, the one about not giving money to bankers.
Photograph: Hulton Archive
Italy’s populist administration ended 2018 with a remarkable U-turn in its debut budget. The New Year has presented another awkward choice to the governing League and Five Star parties — this time on banks.
On Wednesday, the European Central Bank put in special administration at Banca Carige SpA, a mid-sized lender, after its shareholders rejected a plan to raise capital, prompting some board members to resign. The move could buy the bank some time but is unlikely to solve its deeper problems. These include a mountain of bad loans and a lackluster outlook, compounded by Italy’s stuttering economy.