A banking accident waiting to happen

There's only one thing that will stop another banking crisis in the eurozone, says Matthew Lynn. But voters aren't going to like it.

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Banca Popolare di Vicenza needed a helping hand
(Image credit: © 2017 Bloomberg Finance LP)

The rolling crisis among Europe's lenders has been painfully apparent this year. In Spain, Banco Popular had to be rescued in June, in part because of a run on the bank by depositors nervous of getting their money back. In Italy, the government intervened to resolve a crisis at Veneto Banca and Banca Popolare di Vicenza at a cost of around €17bn. And no one believes that those two are more than the tip of a very big iceberg. Italy alone has an estimated €130bn of bad debts in its banking system. There will be lots more in other countries.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.