Improvement in the Italian position in the European programme providing funds for research and development projects. Substantial participation of private companies and strong focus on the issues related to the fourth industrial revolution.
With an estimated 266 billion barrels of oil reserves, the Saudi national oil company would be a giant among public companies: but what would induce Riyadh to sell off its prize asset, now that crude oil (and therefore the value of the asset) is at a ten-year low?
The conversion of the “popolari” banks, the Italian co-operative banks, into joint stock companies could mark the beginning of a new season of bank consolidation, which might involve other credit institutions, as well as the popolari banks. This consolidation is expected to produce significant cost synergies, which, once fully realised, may bolster the income statements and the balance sheets of the new banking groups.
Positive financial results in the first nine months of 2015 for the leading groups listed on the stock market. Aggregate profits more than double on an annual basis as loan impairments sharply decrease. Loans to customers broadly unchanged since the beginning of the year.
The crisis in emerging countries is slowing the recovery of the Italian economy. Even so, exporters to Russia and China are well-equipped to handle a drop in demand.
The wholesale bank funding market has opened up further, especially for covered bonds, instruments which have traditionally paid low yields. As the introduction of the bail-in nears, unsecured bonds are showing a few signs of increases in costs, which seems to have also slowed issues. However, the MREL is also waiting in the wings, which could somewhat require a different funding mix.
Our indicator of systemic risk (SRISK) indicates an expected capital shortfall in the leading Greek banks of approximately €14.5 billion, in line with ECB estimates and below what has been disbursed in the third plan of financial assistance to Greece.
The third bailout offered to Greece could have seemed at first to be yet another “free” loan. Similarly, the call for new elections by the PM Tsipras at the end of the summer could have seemed a risky hawk-dove play to avoid once again the Greek's commitments. Under closer examination, however, these events can be seen as moves that will put some of the pieces of the disarranged puzzle back into place. In fact, Greece could derive some economic benefit from them, not least that of qualifying for the European QE.
At its meeting on 22 October, the ECB opened up the possibility of extending Quantitative Easing (QE2), and stock markets in the Eurozone celebrated with a gain of more than 2% in a single session. With his latest initiative, Draghi has therefore extended the series of “positive surprises” that, for more than a year, he has been providing to European stock markets, and in particular to the Italian market. Will Draghi's words surprise the markets again at the next meeting?
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US bond yields do not seem to reflect neither the domestic economy growth prospects nor the expectations of a less expansionary phase of monetary policy that could start by the end of the year but continue to remain extremely low. One possible explanation is that they are driven by developments in Euro area interest rates.