Italy-based international bank UniCredit saw its shares suspended Monday and 5% losses in overall value as tests showed the country’s banks are still unable to weather financial crises.
Unicredit, Banks ‘Plaguing’ Government
In gloom reminiscent of pre-crisis 2008, stress tests conducted by the regulator showed UniCredit, along with other Italian institutions, would not hold up in the event of sudden fiduciary problems.
Financial instability now looks set to spill over across the border, with the political future of Italy heavily dependent on the action of Matteo Renzi’s government.
“All the issues that have plagued Renzi’s government thus far – a stagnant economy, corruption scandals, banks – are likely to continue to do so,” Mujtaba Rahman, practice head of Europe at political analysts Eurasia group, told UK tabloid the Daily Express.
Post-Brexit Europe has often been a talking point in cryptocurrency circles with pundits seeking to highlight the inherent benefits of Bitcoin over fiat assets. Both GDP and EUR have shown increased volatility following the June 24 referendum outcome, along with overall decreased purchasing power.
In Italy, the alternative Five Star Party is also calling for an referendum in October, specifically on financial issues such as single currency membership. Analysts say the party is set to make considerable gains in future elections.
Regardless of the referendum outcome and whether early elections are held, Italy’s medium-term political outlook is seriously deteriorating as the likelihood of a Five Star win in the next election is now significant.
That Same Old Story
Bailouts appear to be the only solution in the meantime for Italy’s banks, with 5 billion euros about to be pumped in to protect consumers.
At the same time, news last week came of an EU plan to create a database of cryptocurrency users, ostensibly to help in the fight against terrorism and other illegal activities.
Specifically, the European Commission talks of “a centralized database of Bitcoin users, their identities, wallets and financial operations.”
Information would be accessed by “financial intelligence units,” which would “trace terrorist using financial information, while also preventing the movement of funds,” The Merkle reports.
It is unclear as to how such information would be sought and funds blocking initiated given Bitcoin’s innate principles. However, third-party services such as Coinbase have recently made the headlines in their willingness to comply with law enforcement to secure convictions of users from their Bitcoin transactions.
“Only time will tell if these regulations will have a positive impact on counterterrorism statistics,” The Merkle concludes.
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