A great summary of a central bank’s failure to monitor banks

Rough policy notes on Veneto Banca and Banca Popolare di Vicenza (V&V)

This is a very detailed read on the situation with Banco Popular being declared “failing or likely to fail.” The most interesting part of this story is that there was considerable evidence the bank was on the path to insolvency for at least a year. Unfortunately, the ECB took far too long to notice this and now has to scramble to avoid an Italian banking collapse.

This is a great example of how banks tend to under-react to risk. Similar to the financial crisis, these Italian banks likely saw this coming years ago and they did nothing to stop the path.

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