March 18, 2020 / 4:30 PM / in 11 days

Bank of Italy says domestic banks more resilient than in 2008

MILAN, March 18 (Reuters) - Italian banks are in much better shape at present than at the onset of the global financial crisis in 2008, after boosting their capital buffers and shedding problem loans as well as domestic government bonds, the central bank said on Wednesday.

In a letter to the New York Times written in answer to an article on the dangers facing the country’s banking system, the Bank of Italy pointed out that Italian banks’ core capital stood on average at 14% of total assets at the end of last year, double the level of end-2007.

Higher capital reserves allow the industry to better weather losses as a coronavirus outbreak is seen plunging the Italian economy into a deep recession, bankrupting companies and hurting banks’ balance sheets. (Reporting by Valentina Za and Stefano Bernabei; editing by Agnieszka Flak)

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