Below are some key takeaways from the Bank of Italy’s recently published Financial Stability report.
- The risks to financial stability posed by developments in the world economy are increasing.
- Protracted trade tensions are escalating uncertainty and could have negative repercussions on growth.
- The ending of monetary stimulus in the United States has tightened global financial conditions.
- In Italy, the main risks to financial stability stem from low growth and high public debt.
- Large and lasting increases in risk premiums on government securities affect the value of household wealth, curb lending to the private sector, and worsen the liquidity and capital positions of banks and insurance companies.
- In the banking sector credit quality has continued to improve as has profitability.
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