Italy: Financing gap widens
Lack of SME demand for funding might have been exaggerated. But many of those that seek funds might be risky prospects.
Rating agency Fitch greeted the start of 2014 in the now traditional manner, by putting out a negative outlook on large Italian banks for the third consecutive year, citing their continued vulnerability to a fragile domestic economy whose recovery is likely to be slower and weaker than the eurozone average.
Fitch claims: "The main risk for asset quality will come from SME exposures because Italy’s SME sector is the largest in the EU and these businesses have been particularly susceptible in the prolonged recession. Corporate exposures are also likely to see further credit weakening. Manufacturing, real estate and construction remain the most volatile."
It is not a promising backdrop against which to discuss the prospects for improving the flow of funding to the country’s SMEs.