Italy’s Economy Minister, Giancarlo Giorgetti, is monitoring market developments in the wake of the Silicon Valley Bank (SVB) collapse, according to a statement issued by the ministry on Monday. The ministry added that the European Union must take action swiftly to support banks as required. “We commend the swiftness with which the US authorities intervened and we believe that European authorities, if necessary, will do the same with equal speed, considering the implications for monetary policy and financial stability,” the statement read.
On Monday, the stock of banks in Europe and Asia tumbled as US efforts to guarantee the deposits of the collapsed tech-focused lender SVB failed to reassure investors about the financial stability of other banks. However, a government official noted that there were no indications of negative consequences spreading to Italy’s wider financial system and played down the fall in bank stock prices, saying that it was to be expected.
Shares in Intesa Sanpaolo (ISP.MI), UniCredit (CRDI.MI), and Banco BPM (BAMI.MI), the largest lenders in Italy, fell between 5% and 7% in morning trading on the Milan bourse. Despite this, the official added that no new information had emerged that would warrant special intervention at present. However, concerns about contagion from the SVB’s collapse persisted, highlighting the need for EU regulators to take swift action to protect against further destabilization in the market.
The European Union has not yet provided guidance on how it will address this issue, but the Italian government is calling on regulators to act quickly to shore up banks and preserve financial stability.
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