The health of Banca Monte dei Paschi di Siena and other Italian lenders has been discussed by EU officials during routine meetings with Italian authorities this week, two sources have told Reuters.
“The EU Commission is closely monitoring the impact of a rising gap between Italian and German bond yields on the Italian banks,” a Commission source said, adding that the Bank of Italy was planning to publish an assessment of the impact of yields.
“During their visit to Italy the EU officials discussed the situation of MPS and other banks,” an Italian government source said.
Each year, the Commission undertakes a detailed analysis of each country’s plans for budget, macroeconomic and structural reforms. It then provides EU governments with country-specific recommendations for the next 12-18 months.
The president of the European Central Bank, Mario Draghi, warned on Thursday that a recent sell-off in Italian government bonds was set to dent the capital of Italy’s banks, which own about 375 billion euros ($426.30 billion) worth of that paper.