September 23, 2020

Guindos (ECB) warns that Italy's budgets and debt are a "risk" for the financial sector

Guindos (ECB) warns that Italy's budgets and debt are a "risk" for the financial sector



In a speech delivered in Amsterdam (Netherlands), the Spanish banker has warned that concerns about debt sustainability have "increased" in Europe.

"In relation to public finances, Italy is the most prominent case in view of its level of debt and political tensions around the budget plans of the Italian Government," stressed the vice president of the monetary authority.

Likewise, Guindos has indicated that doubtful loans remain as another risk for the financial sector of the European Union. On the other hand, he pointed out that a change of trend in the economy of the United States, which is experiencing an expansionary period "significantly longer than the historical average", could provoke a "correction" in the markets.

On the other hand, the banker has urged the European Union to deepen the development of the Banking Union to achieve an "integrated" capital market.

"The Banking Union will help to address concerns about financial stability in relation to (…) cross-border contagion," he added, after ensuring that the challenges of the financial sector are related to the fragmentation that exists between banks and that "its operational efficiency and profitability.

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