Global media and markets have been keenly watching the U.K. and Europe since British voters decided to leave the European Union in the June 23 referendum. The vote created political and economic disarray and the world is still trying to untangle the effects of the landmark result.
However, Britain isn’t the only potentially troublesome situation in the region. Take, for example, Italy, where banks are facing a possible debt crisis resulting from a staggering 17% of loans going bad – a level 10 times higher than in the U.S. – after years of low lending standards combined with a downturn in the economy caused bankruptcies to skyrocket. The Italian government is seeking the EU’s permission to provide the banks with a €40-billion bailout, despite rules adopted in 2014 designed to make such use of taxpayers’ funds more difficult. While the full effects of Brexit may still be years away, the fragility of the Italian banking sector could threaten the Eurozone’s stability much sooner.
Despite the obvious and overwhelming uncertainty in the U.K., the situation in Italy serves as a timely reminder that there are always several important situations, issues and developments worth keeping an eye on, not just the one getting the most attention. Staying informed on each one is key to making the right decisions as your firm navigates the ever-changing global landscape.
This article was originally published on ShiftCentral, now part of LAC Group.
Mario Thériault
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