Italian banks faced intense market pressure in January due to concerns about their still very high levels of bad debts. These fears were ignited when the European Central Bank requested further details on nonperforming loan portfolios from banks including UniCredit, Banca Monte dei Paschi di Siena and Banco Popolare.
Shares of these banks plummeted as a result, with almost one-third of the value knocked off UniCredit’s stock.
Last week, Pier Carlo Padoan, who has led Italy’s Ministry of Economy and Finance since 2014, said markets had panicked unnecessarily after the central bank’s request.
“Some information request, which was totally neutral, technical and fine, was interpreted as the way the new world impacts on banks. This is clearly something that needs to be fixed,” he said at a CNBC panel at the World Economic Forum in Davos, Switzerland.