Italian Debt Problems No Threat to U.S. Banks

Italian Bond Market

Just as its Greek counterparts, Italy is facing a severe debt crisis as the Eurozone is failing economically. Unlike Greece though, Italy is in no immediate danger of defaulting.


Despite troubled financials and high debt, the recent government budget has met guidelines to avoid defaulting and maintain stable credit, according to rating agency Fitch.


Italy is the third largest economy in Europe, meaning the US economy has exposure to their bond market. This has raised some concerns to banks and investors in America.¬† Brad Hintz, a¬†Sanford Bernstein analyst. stated that just due to the sheer size of Italy’s bond market, there will be some exposure.

Italian Bond Market

However with the budget expected to keep a default away and allow Italy to maintain their current rating, U.S. banks should find relief.

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